What Exactly Is Bankruptcy Law? Read This Article to Find Out

To file for bankruptcy is to undergo a legal process undertaken by a corporation or an individual unable to fulfill its financial (and other related) obligations at that specific time and seek to have the debts reorganized or discharged by the courts. There are three common types of bankruptcy procedures – individual petitions (also known as Chapter 7), corporate reorganization and rehabilitation petitions (also known as Chapter 11), and wage earners’ plans (also known as Chapter 13).

While bankruptcy cases are nearly entirely governed by federal law, many U.S. states may enact legislation to address matters that federal law might or does not cover. Only debtor-creditor issues are heard in special bankruptcy courts around the country. It is standard procedure to file any bankruptcy-related claim with the United States Bankruptcy Court.

Some Bankruptcy Terms

· Bankruptcy Petition

This document commences bankruptcy actions and is filed with the United States Bankruptcy Court. This document includes the debtor’s debts, assets, and other liabilities.

· Discharge

To remove a debtor from the obligation to pay a debt.

· Insolvent

Unable to pay one’s obligations when they become due.

· Chapter 7 (Individual Bankruptcy)

This is a petition filed under Chapter 7 of the United States Bankruptcy Code by an individual debtor seeking to liquidate assets and settle or discharge debts.

· Chapter 11

Also known as a Business Reorganization procedure, this is a petition filed under Chapter 11 of the United States Bankruptcy Code by a business to restructure its obligations and assets and settle or discharge its debts.

· Chapter 13 (Wage Earner’s Plan)

This is a petition filed under Chapter 13 of the United States Bankruptcy Code in which a bankrupt debtor asks the court for more time to fulfill all financial obligations as long as the debtor receives a stable income.

Some Other Factors to Consider When Hiring a Bankruptcy Attorney

While most lawyers will have to seek authorization to practice in a United States Bankruptcy Court, to effectively represent a bankruptcy client (individual or company) necessitates a solid understanding of the United States Bankruptcy Code. Attorneys without the necessary experience may not be aware of all the choices available to a client facing bankruptcy and, consequently, might be unable to properly negotiate the most attractive bankruptcy strategy.

Bankruptcy can have long-term advantages and implications for a person’s financial and familial circumstances. This is just another reason why engaging an experienced attorney is critical. An experienced bankruptcy lawyer in Maryland with a wide range of insight in helping bankruptcy clients file for bankruptcy can better prepare you, preserve your assets, and limit the negative consequences.

Also, it is not unusual to engage a lawyer from another state for a case so long as they are licensed to offer their services in that state. For example, engaging a Maryland business attorney in Florida for bankruptcy and other related business cases (such as insurance) is not unusual. Do not be surprised to find your personal Maryland business attorney in Florida!

The Bottom Line

Bankruptcy in South Florida, Mayland, and Annapolis does not have to be stressful for you. Now that you know why you need to get an experienced bankruptcy lawyer in Maryland when you need to, getting the right one should be the new focus. It might seem not easy, but it is well worth the wait.

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