Bankruptcy Law Simplified

Although many Americans are unfamiliar with the way bankruptcy works, it’s an important Constitutional right. Here’s how Canyon Legal Group can help you take advantage of bankruptcy law and move on with your life.

What Is Bankruptcy?

Bankruptcy is a formal legal status designed to protect people who find themselves in overwhelming debt. By letting debtors manage what they owe using alternate methods, bankruptcy makes it possible to get your head above water responsibly. It’s a massive improvement over having to deal with creditors that won’t leave you alone or losing your property and wages for good.

What Does Bankruptcy Law Mean for You?

In the U.S., everyone has a right to file for bankruptcy protection. After you file, a special court evaluates your case to determine if it can resolve the problems.

When you file to request bankruptcy status, you’ll seek a specific chapter, or type of protection. Some common options include

  • Chapter 7, or straight bankruptcy, where you liquidate or sell assets to pay your debts,
  • Chapter 11, or reorganization, where businesses and their creditors work with impartial third-parties assigned by the court to come up with functional repayment arrangements, and
  • Chapter 13, or debt consolidation, where you create a three- to five-year repayment plan to pay off your debt.

Understanding the Distinctions

Although bankruptcy is a federally guaranteed right, each state has its own laws concerning how it works. For instance, individual locales make different kinds of property, such as your home, primary vehicle and essential personal possessions, exempt from liquidation.

It’s also worth remembering that the different bankruptcy chapters have distinct rules concerning

  • How long your bankruptcy filing stays on your credit history,
  • Who’s eligible to file based on their status as a business entity, amount of debt and type of debts, and
  • What kinds of credit counseling, education and filing procedures you need to go through before your bankruptcy petition can be approved.

No matter which form of bankruptcy turns out to be right for you, there are some undeniable benefits. For instance, regardless whether the court decides to award you bankruptcy protection, the act of filing grants you an automatic stay, or a temporary break that puts a stop to events like debt collection, wage garnishments, evictions and lawsuits.

How Can You Leverage the Law?

Bankruptcy isn’t right for every consumer or business owner, but it can dramatically improve the lives of those who use it wisely. Don’t you owe it to yourself to find out whether filing might help you get some much-needed breathing room?

Discover how to seek financial relief through bankruptcy law. Contact Canyon Legal Group for a complimentary case evaluation now.