For all of its complexity, bankruptcy law attorneys are among the most commonly called upon in all of law, especially over the last few years. The condition of the economy in America has made it very difficult for people to effectively manage their finances and as a result many people have had to seek legal counsel regarding bankruptcy. Most people know about bankruptcy from a distance. That is to say, they know about it in very general terms, they’ve heard about other people having to declare it, and they can probably tell you that they know it’s not something that people enjoy having to do. But they may not actually know what it is.
So what exactly is bankruptcy? To put it in its simplest terms, bankruptcy is an option that is available to individuals and businesses who end up owing a creditor or creditors more than they have the ability or resources to pay. The option essentially allows that individual or business to put together a plan to repay what they owe over a specified period of time. There are a few different kinds of bankruptcy that can be filed such as Chapter 13 and Chapter 7. The former involves scheduled repayment to creditors over time and is typically used as the standard definition while the latter is a complete elimination of debt.
Chapter 7 is the most common form of bankruptcy for individuals. It allows them to make a fresh financial start despite the fact that it is a detriment to their credit rating. It is essential that anyone thinking about filing bankruptcy speak to a bankruptcy attorney before proceeding.
