Bankruptcy is the legal solution that can help individuals or businesses with overwhelming debts regain control of their finances. An article posted in the website of the United States Courts says that a chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court:

  • Schedules of assets and liabilities;
  • A schedule of current income and expenditures;
  • A statement of financial affairs; and
  • A schedule of executory contracts and unexpired leases.

Courts charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing, however, with the court’s permission, individual debtors may pay in installments.

Filing bankruptcy will mean immediate cessation of whatever form of harassment (in the form of e-mails, phone calls, letters, text messages, lawsuits and others) law firms and debt collectors use to force debtors to make payments.

There are different options in the bankruptcy law, each intended to address a person’s or a business’ specific financial situation. Assessing your situation well is necessary so that you will know which bankruptcy chapter to file and whether you qualify under such chapter’s protection.

Chapter 7 bankruptcy, for instance, is a liquidation bankruptcy.  This is best for people or businesses that have properties, but whose income does not go above the stipulated limit set under the chapter. As the definition suggests, this law will require the liquidation of a few of your properties (you can choose specific properties, though, that should not be sold). The selling is to be done by a court-appointed trustee who will also use the amount earned to pay your creditors. Debts to be paid are only those categorized as non-dischargeable, such as court fines, alimony and student loans. Medical bills, business and personal loans, debts due to use of credit cards are called dischargeable debts, meaning, the court may free you from the obligation of still paying these.

One requirement this law has is the means test, which applicants need to pass. The means test is a way to determine if your income is low enough to qualify you to seek the protection of this chapter.

The Bradford Law Offices, PLLC, says that Chapter 7 is one of the most commonly sought forms of bankruptcy because it provides individuals with a way to discharge, or completely eliminate, many of their existing debts.  If you are suffering under the weight of unmanageable debt, Chapter 7 bankruptcy may be able to provide you with much-needed relief.


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The U.S. Bankruptcy Code offers businesses and individuals various legal means which will allow them rise up from overwhelming debts and regain stability in their financial future. These legal solutions include liquidation bankruptcy or reorganization bankruptcy.

Bankruptcy, per se, offers many advantages, such as:

  • the restructuring or reorganization of the debt payment scheme to make monthly payments more affordable;
  • the discharge of all unsecured debts (such as debts due to credit card use, medical bills, personal loans, etc.); or,
  • the liquidation of certain assets and properties to pay non-dischargeable debts (these are usually debts owed to the government).

There are different chapters in the U.S. Bankruptcy Code, each designed to address an individual’s or a firm’s specific financial situation. There is chapter 7 (which is liquidation bankruptcy), chapter 11 (or business reorganization), and chapter 13 (or business reorganization designed for sole proprietors).

In the year 2010 alone, the U.S. federal bankruptcy courts recorded the filing of more than 1.5 million personal bankruptcy cases. Millions of American individuals and hundreds of business firms (both small and giant firms) resort to bankruptcy due to the many advantages it offers. However, a good business lawyer would not immediately offer bankruptcy as the main solution to overwhelming debts. He/she will first discuss bankruptcy’s advantages and disadvantages, as well the benefits and detriments of other legal means, like debt negotiation.

As explained in the website of the Bradford Law Offices, PLLC, debt negotiation is a better option due to the more manageable payment plan that it offers. This is because debt negotiation:

  • Does not require a litigation process (which bankruptcy requires);
  • Offers debtors the choice of paying the debt through a single/lump sum payment or through more affordable monthly payments;
  • Frees a debtor from being harassed by debt collectors, as well as from lawsuits and any legal action that will result to the forced sale of his/her properties;
  • Reduces or defers interest payments, lengthens the time span of payment, and allows the consolidation of loan payments; and,
  • Reduces the amount of the loan to more than half its original sum.

It will require great negotiation skills and extensive financial expertise, however, to make debt negotiation effective and successful. And this is what the likes of Ryan Ruehle have been specially trained to deliver.

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