The filing of a bankruptcy case will immediately create an “automatic stay” that would protect the person filing the case from their creditors. In Chapter 7 most debts can be eliminated by the bankruptcy “discharge” and in a Chapter 13 or Chapter 11 case most debts can be cured, reduced and/or reorganized under a plan. Bankruptcy cases are overseen by a federal bankruptcy court that specifically has jurisdiction to administer bankruptcy cases and therefore there is a forum to go to if there are disputes or issues as to a case. However, creditors are generally respectful of the bankruptcy stay and bankruptcy discharge and will cease all collection efforts upon the filing of a case, and note the discharge on a person’s credit report.
A bankruptcy filing is often used for many situations of where there are financial challenges to individuals and/or businesses as follows:
The above uses of bankruptcy are not exclusive and a bankruptcy case can be used for other purposes.
However, an individual or business contemplating filing a bankruptcy case should carefully review their goals with a bankruptcy attorney since bankruptcy law can be complex. A bankruptcy attorney will be able to determine whether the above goals can be achieved depending upon the particular circumstances of a situation.
Please call us at (631) 271-3737, or e-mail us at firstname.lastname@example.org for a free consultation to discuss such legal options in greater detail.