The Purpose of Bankruptcy

The main purpose of bankruptcy is: (1) to give an honest person/debtor a "fresh start" in life by relieving the debtor of most debts, and (2) to repay creditors in an orderly manner to the extent that the debtor has the means available for payment. This isn't always the case, it usually works this way. Sarasota bankruptcy lawyers allow debtors to be discharged from the legal obligation to pay most debts by submitting their non-exempt assets, if any, to the jurisdiction of the bankruptcy court for the distribution among their creditors. A bankruptcy case is initiated by the filing of a petition (which is almost always done by a qualified bankruptcy attorney), which contains the Debtor's financial information. If you're married, you can file a joint form, but it usually doesn't matter.

Let's talk about the two main types of bankruptcy: liquidation and reorganization. In the United States of America, the law provides for one liquidation (this is Chapter 7); all of the other types or chapters are for reorganization. Here are those chapters:

- Chapter 9
- Chapter 11 (for businesses or individuals)
- Chapter 12 (for your farmers)
- Chapter 13 (for individuals)

Bankruptcy is really a pretty bad deal. If you file for bankruptcy, it will be hard to get a mortgage, obtain a credit card and many other things. That is why it should be your last option.

This concludes the lesson on the purpose of bankruptcy for those in need of a Sarasota Bankruptcy Attorney.

This information is not legal advice and should not be used for legal purposes. Please find a lawyer in your area who can effectively help you file for bankruptcy.