You must have heard about a bankruptcy lawyer? But, do you know what types of cases are handled by such a professional? Although, every personal bankruptcy case is different and unique, still, the types of cases handled by such a lawyer can be divided into two main types –
Chapter 13
Chapter 7
These are both different forms of personal bankruptcy cases. In addition to this, there are lawyers who deal with Chapter 11 and 12. However, they are specialized professionals who deal with insolvency cases filed by an entity or a company. Generally, all bankruptcy attorneys deal with the personal insolvency cases. If you are facing financial problems and are incapable of paying the debts that you have accumulated in your name, then you need to file a personal insolvency case. That is why it is important for you to know about the types of personal insolvency cases that a lawyer will deal with. Given below is a short discussion on the two main types of personal bankruptcy cases.
Chapter 7 – This is also known as liquidation bankruptcy. Under this type, if you are unable to pay your debts and are facing financial difficulties, all your non-exempted properties will be liquidated by the court of law. The liquidation process is basically selling of your non-exempted assets in a public auction. The entire process will be supervised by a court-appointed trustee. The bankruptcy lawyer whom you have hired will also be present at the auction on your behalf. Sometimes, such an attorney might appeal to the court of law not to put a few of your necessary belongings at the auction so that you are capable of making a fresh financial start with those. But, filing insolvency is not advice if you are the owner of valuable properties like a car and a house. The money obtained from selling your assets will be used to pay your creditors. If there is excess money, it will be returned to you and if still there are any more debts in your name, those are dissolved or dismissed by the court. Thus, you get relief from the burden of debts and the harassing calls of the creditors.
Chapter 13 – Under Chapter 13, a bankruptcy lawyer negotiates and argues at the court of law to bring you a fresh repayment plan with which you will be able to repay your debts with your earnings. A lawyer will help you to get a flexible payment plan and will even negotiate to reduce the interests. In addition to this, s/he will help you to manage your finances in the future.
Now, you should ask your bankruptcy lawyer about the type of insolvency case you should file for.
