Bankruptcy helps people who cannot meet financial obligations to be excused from paying some of the debt.  Bankruptcy has been in existence since ancient times.  Rules and rules for filing bankruptcy in the United States are governed by the Federal government.  States are normally prohibited from registering bankruptcy.  There are two types of bankruptcy namely liquidation and reorganization bankruptcy.  In liquidation bankruptcy, one is required to surrender all the properties which are sold and later the proceeds are distributed to the creditors where in return the credit is permanently discharged.  In reorganization bankruptcy debtors are allowed to keep their property but they must agree to repay the creditors in an installment plan.  When filling the bankruptcy, you are required to give the petition and fee to the bankruptcy court.  The fee to be paid is close to $300. The petition entails the sworn statements by the debtors and the amount the creditor owes and their income and expenses and a list of all assets. Liquidation bankruptcy is attractive to everyone who cannot pay the bills as it wipes out all debts completely.  Reorganization bankruptcy is found in Chapter 13. Reorganization bankruptcy offers some benefits besides allowing the debtor to keep the property.   The common types of bankruptcy are Chapter 7, Chapter 11 and Chapter 13.  Chapter 7 is the individual’s petition, Chapter 11 entails business reorganization and rehabilitation petitions and Chapter 13 deals with wage earners plans.  Insolvent and discharge are some of the keywords that are commonly used in bankruptcy law.

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