The first question any bankruptcy attorney Lawrence KS should answer is: “what is bankruptcy?”
Now, bankruptcy is a legal status of inability to discharge one’s debts. After a declaration of bankruptcy by a court of law, the property of the debtor is vested in a trustee who will distribute the assets “pari-passu” among the creditors. “Pari passu” means that the assets will be distributed according to the percentages of the debts owed in the light of the total amount of debts. There must therefore be proof of debts first.
Also, a bankruptcy attorney should tell you that bankruptcy can either be voluntary or involuntary. Voluntary is when the petition is filed by the debtor seeking a declaration of bankruptcy while involuntary when it is filed by the creditors upon commission of an ‘act of bankruptcy.’
Another thing you should know is that Bankruptcy is founded on the Constitution of the United States. Article 1, Section 8, Clause 4 stipulates that congress shall enact laws relating to bankruptcy. As things stand, two major legislations have been enacted on this regard. The first is the United States Bankruptcy Code which is a codification of the Bankruptcy Reform Code of 1978. This provides the substantive law relating to bankruptcy. Procedural law in this regard is enshrined in the Federal Rules of Bankruptcy Procedure.
The bankruptcy attorney should also notify you of the various forms of filing for bankruptcy. The Bankruptcy Code is divided into 15 chapters which mainly highlight the ways of filing for a bankruptcy petition. There are 3 main ways in this regard as defined in chapters 7,9,13 and 17.
In their order, chapter 7 deals with liquidation. This is the most common way of filing for bankruptcy and it is characterized by the vesting of the assets of the debtor to the trustee. Chapter 9 deals with the reorganization of municipalities. Chapters 11 through 13 provides for reorganization of the assets and debts in an attempt to reach to a court-sanctioned payment plan.
One of the most important things a bankruptcy attorney should tell you is that filing for bankruptcy has its own ups and downs. To begin on the negative, you stand to face a lot of embarrassment. This is besides losing your assets and facing various limitations on your person. For starters, you can forget about getting a loan or a mortgage. And the list of limitations is endless.
The main advantage of filing for bankruptcy is that it grants you a ‘new lease of life.’ Your debts will eventually be discharged and you can start all anew. Nothing beats that. On a less serious note, although the terms ‘bankruptcy’ and ‘insolvency’ are used interchangeably, they carry different meanings. They both connote an inability to pay debts, but the subjects are different. Bankruptcy is for individual persons while the term ‘insolvency’ should be tied to companies and other corporate entities.
Half of the things a Bankruptcy Attorney Lawrence KS should tell you haven’t been discussed herein above. This outline should however prove useful for a person seeking legal services on bankruptcy for the first time.
A bankruptcy attorney in Lawrence KS should be able to advise you on the pros and cons for filing for bankruptcy. For further information please Contact Joseph I. Wittman, Attorney at Law today!!