Definition of Bankruptcy Law
Bankruptcy is a legal procedure initiated by an individual or a business that cannot pay their debts and seeks to have the debts discharged or reorganized by the courts. The three most common types of bankruptcy proceedings are Chapter 7 individual petitions, Chapter 11 business reorganization and rehabilitation petitions, and Chapter 13 wage earner's plans.
Bankruptcy cases almost exclusively fall under federal law, though states may pass laws governing issues that federal law doesn't address. Special bankruptcy courts nationwide handle only debtor-creditor cases. Generally, any bankruptcy-related claim must be filed with the U.S. Bankruptcy Court.
Terms to Know
For more legal definitions, visit the Findlaw Legal Dictionary.
Other Considerations When Hiring a Bankruptcy Lawyer
Although most lawyers are free to request permission to practice in U.S. Bankruptcy Court, effectively representing bankruptcy clients requires thorough knowledge of the U.S. Bankruptcy Code. Attorneys without the proper experience may not know all of the options available to a client facing bankruptcy, and as a result, they may not be able to broker the most advantageous bankruptcy plans.
Bankruptcy proceedings can have long-term benefits and consequences for an individual's financial and family situations. This is another reason why finding an experienced lawyer is essential. A lawyer who has helped many clients through bankruptcy can better prepare you and protect your assets and minimize the negative effects.
If you are facing bankruptcy, contact a bankruptcy lawyer immediately to preserve your legal rights and explore your legal options.
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