Bankruptcy is a mechanism or procedure designed by the United States Congress to afford individuals and companies relief from creditors and debt that is affecting their livelihood and ability to manage their financial affairs. Bankruptcy provides immediate relief in the form of the “automatic stay” provision of the Bankruptcy Code which goes into effect as soon as the Bankruptcy is filed. This is a method whereby all creditors are immediately stopped from pursuing an individual or company which has filed bankruptcy. This is effective against all types of creditors, even the IRS (Internal Revenue Service).
There are three types of bankruptcy cases that are available to individuals as follows.
Chapter 7- Known as “Straight Bankruptcy” or Liquidation Bankruptcy
Chapter 13 – Debt Consolidation or Wage Earner Plan
Chapter 11 – Reorganization of Financial Affairs
There are two types of bankruptcy cases that are available to companies or corporations:
Chapter 7 – Liquidation Bankruptcy
Chapter 11 – Business Reorganization Bankruptcy
There is a more in-depth look at the different types of bankruptcy contained in the “Types of Bankruptcy” section which explains some of the options available under the United States bankruptcy Code for bankruptcy relief to both individuals and businesses experiencing problems due to unpaid debts. Please note that the information provided is a summarization and the circumstances surrounding the specific issues of each individual and/or company should be examined and analyzed by an attorney before any decision concerning bankruptcy is made. We can arrange a free consultation to assist in deciding if a bankruptcy filing is the right path for you. Please contact us:
Phillip K. Wallace
Attorney at Law
4040 W Florida St, Suite 203
Mandeville, LA 70448