Bankruptcy Laws

Filing for bankruptcy ranks among the toughest of decisions that someone may take over their lifetime. It could help you avoid a lot of stress and get your life back on track financially. Mounting debts can be a real problem. Sometimes it can lead to situations where criminal financial investigations too are possible.

Learn more about criminal financial investigations

There are exclusive laws governing bankruptcy. In fact, qualifying for bankruptcy is in itself considered a stringent process. As per laws if you earn a regular income you can file Chapter 13 bankruptcy, in which case you can pay off your debt over a period of three to five years. Filing under Chapter 7 would mean that a court appointed trustee would be responsible for overseeing that your creditors receive as much money as possible. They do so by auctioning your property, which is now a part of the bankruptcy estate.

What happens when someone goes bankrupt?

As soon as you declare bankruptcy, an automatic "stay" will come into effect. This would mean that your creditors may no longer try to collect money from you. This could lead to a lot of stress being lifted from the minds of those declaring bankruptcy. If they have filed for Chapter 13 bankruptcy then the court will plan a repayment strategy spread over a few years. An official appointed by the court would oversee that the creditors are being repaid. Similarly, in the case of a Chapter 7 bankruptcy filing, all your property would become part of something known as the 'bankruptcy estate'. A court appointed trustee would be auctioning off from this property and overseeing the repayment to your creditors.

How to prevent yourself from going bankrupt

Given the kind of mental anguish and stress that it causes, it is most advisable to avoid filing for bankruptcy. There are various ways in which you can do so. One of the simplest ways you can do so is by selling off some of your assets and use the money to pay off your creditors. Another way would be to negotiate a deal with eh debtors. Remember, your creditors would want at least some money back from you instead of getting no money at all. Tell them that you are in great financial stress, however you would pay them back in some more time. Request them for things such as decreasing monthly interest or installment, or better still both. Many credit card companies for example, are known to agree to such revised repayment options. Another good option would be to borrow from friends and family members and clear off your debts.

What if someone files for bankruptcy?

As mentioned earlier, once you file for bankruptcy under Chapter 7, your entire property would be transferred to a bankruptcy estate. A court appointed trustee could then auction off your property to pay off your creditors. Under Chapter 13, which is for those with earning a regular income, the debts are paid off over a period of time.

What happens when someone you know files for bankruptcy?

Bankruptcy laws can be complicated to understand. It is therefore always recommended that you hire the services of an experienced bankruptcy attorney, for getting you help with criminal financial investigations or any other help for that matter. A bankruptcy attorney would also be able to guide you in case of someone who owes you money files for bankruptcy too.

How can a criminal prosecutor help you?

A criminal prosecutor can help someone who is on the verge of filing for bankruptcy by reviewing their income, debts, as well as assets. They would also determine which Chapter is the best suited in their situation for filing bankruptcy. They would also be dealing with all the creditors on behalf of their clients.