Bankruptcy - An Overview
Even the hardest workers and the most diligent bill-payers can find themselves with more debts than they can pay as they become due. In such cases, filing bankruptcy may provide a solution to what seems like an insurmountable problem.
If you or someone you know is facing serious financial challenges, it is very important to seek the counsel of an experienced bankruptcy attorney.
Once considered a last resort, bankruptcy has evolved into an accepted method of resolving serious financial problems. The bankruptcy lawyer's goals are to help debtors make a fresh start and ensure that creditors get paid.
A skillful attorney can guide you through the complicated legal maze of bankruptcy.
Bankruptcy law is primarily federal in origin and therefore varies little from state to state. The United States Constitution grants to Congress the power to establish uniform bankruptcy laws throughout the United States, which ensures consistency and predictability in how bankruptcy proceedings are conducted. The individual states do, however, retain jurisdiction over certain debtor-creditor issues that are not addressed by and do not conflict with federal bankruptcy law, such as which property remains exempt from creditors' claims.
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Consumer Bankruptcy
When an individual falls desperately behind in his or her debt payments, one option may be to declare bankruptcy, a legal proceeding conducted in a federal bankruptcy court that allows the debtor to be relieved of some or all of his or her debts. Filing bankruptcy is not a panacea, however. Although in many ways bankruptcy can give a person a fresh start, it is important to remember that bankruptcy can also negatively affect his or her credit rating and make it hard to obtain credit in the future. A lawyer experienced in bankruptcy law can advise you as to whether bankruptcy may be the right move for you.
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Commercial Bankruptcy
Just like consumers, small businesses sometimes find themselves in the uncomfortable position of being unable to pay their debts in a timely manner. In such cases, one solution is to declare bankruptcy, a legal proceeding in a federal court that releases the business from the obligation of paying all or some of its debts. Filing bankruptcy is not a perfect solution, however. Although bankruptcy is said to provide a business with a fresh start, it can also negatively affect the business's credit rating and make it hard to obtain credit in the future. And in some types of bankruptcies, the bankrupt business actually ceases to exist when the proceedings terminate. A lawyer experienced in bankruptcy law can advise small business owners as to whether bankruptcy may be the right move for them.
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Avoiding "Credit Repair" and "Credit Counseling" Scams
With over a million Americans filing for bankruptcy each year and with household debt at record highs, consumers are reaching out to "credit counselors" and "credit repair" companies with increasing frequency. Although there has been a recent surge in the number of these organizations readily available to offer help to consumers, there has also been a rampant increase in the number of unscrupulous operators ready to take advantage of unsuspecting debtors. A lawyer experienced in consumer credit or bankruptcy law can help protect debtors from these unscrupulous practices and advise them on the most prudent course of action.
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Surviving the Emotional Effects of Bankruptcy
No matter what circumstances ultimately led to filing bankruptcy, both the practical and the emotional impact on the debtor will be huge. Confronting the emotional and psychological issues surrounding bankruptcy and reaching an understanding and acceptance of the situation are essential to rebuilding and maintaining a successful financial life. An experienced bankruptcy attorney can guide a debtor through the complicated legal, financial, and emotional maze of bankruptcy and steer him or her in the right direction for the future.
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