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What exactly is bankruptcy? |
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Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court.
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Aren't there different kinds of bankruptcy? |
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Yes. Bankruptcies can generally be described as "liquidation" or "reorganization". There are several types of bankruptcy proceedings. Attorney mark a. Roseman offers a free consultation to explain how chapter 7 may discharge your personal liability on credit card bills and other debts. He can explain how chapter 13 can stop your foreclosure and may permit you to cure your mortgage arrearage through a 5 year schedule of monthly payments through a wage earner's plan.
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What is the Bankruptcy Code? |
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The Bankruptcy Code refers to Title 11 of the United States Code. (11 U.S.C. 101-1330) Federal Law governs bankruptcy.
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What is a Chapter 7? |
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Chapter 7 is the most common form of liquidation bankruptcy. It is a "fresh start" proceeding in which a consumer or business asks the bankruptcy court to wipe out (discharge) the debts owed. Certain debts cannot be discharged. In exchange for the discharge of debts, the business's assets or the consumer's nonexempt property is sold (or "liquidated"), and the proceeds are used to pay off creditors. Chapter 7 is available to individuals, married couples, corporations and partnerships. Individual debtors typically receive their discharge within 4-6 months of filing the case. Any wages the debtor earns after the case is begun are the debtor's, beyond the reach of creditors who had claims on the date of filing.
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What is a Chapter 11? |
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Chapter 11 is a reorganization proceeding, typically for corporations or partnerships. Individuals, especially those whose debts exceed the limits of Chapter 13, may file Chapter 11. In Chapter 11, the debtor usually remains in possession of his assets and continues to operate any business. The debtor proposes a plan of reorganization which, upon acceptance by a majority of the creditors, is confirmed by the court and binds both the debtor and the creditors to its terms of repayment. Plans can call for repayment out of future profits, sales of some or all of the assets, or a merger or recapitalization.
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