What is bankruptcy?
Bankruptcy software is a federal program established to provide debt relief to persons and organizations suffering from financial difficulties. Different types of bankruptcy relief are available under various chapters of the United States Bankruptcy Code. The two primary forms of bankruptcy relief available for individuals are under Chapters 7 and 13.
What type of relief does bankruptcy provide?
Filing bankruptcy under any chapter of the United States Bankruptcy Code will immediately get creditors off your back. Creditors, including collection agencies and attorneys, must immediately cease all further communication with you and may not take any further action to collect a debt from you. Creditors may not file, pursue or collect any lawsuit or judgment against you, garnish your wages or take, repossess or foreclose on any of your property. Any court hearings in any existing lawsuits will be canceled. Most civil court judgments entered against you at any time prior to filing bankruptcy will be null and void upon the conclusion of your bankruptcy proceeding.
Why is it legal to file bankruptcy?
In times when consumer debt is at an all time high, even the affluent can be confronted with overwhelming debt as a result of a job loss, death of a family member, illness or other reasons. For many of us, this debt is insurmountable and causes family problems, feelings of hopelessness and even suicide. With credit card interest rates of 18–30% and the relentless bombarding of seductive messages cajoling us to “charge, consume, buy”, it is not surprising that so many people are drowning in debt. In establishing our bankruptcy software laws, Congress recognized that responsible, well-intentioned people could from time to time run into financial difficulties. By allowing you to recover from your debt burden, you will be able to start fresh, look to the future and become a more productive member of society. This is good for you and your family and good for society as a whole.
How is a bankruptcy proceeding initiated?
A bankruptcy proceeding is initiated by filing a bankruptcy petition in the United States Bankruptcy Court. A bankruptcy petition contains information about your assets, liabilities, income and other financial information.
What is Chapter 7 bankruptcy?
When you file bankruptcy software under Chapter 7 all or most of your debts are completely forgiven or “discharged”. You do not have to pay anything to your creditors. A Chapter 7 bankruptcy proceeding is the most common type of bankruptcy and can completely eliminate credit card debts, medical debts, personal loans, lawsuits, court judgments, deficiency balances due on automobile loans, debts related to automobile accidents, federal income taxes that are more than three years old and most other types of debts. A Chapter 7 bankruptcy will not eliminate student loans except in undue hardship cases, certain types of taxes, alimony or child support payments, fines, penalties, criminal restitution, debts incurred through fraudulent conduct, debts incurred through intentional injury to person or property or debts from personal injuries caused while intoxicated. A Chapter 7 bankruptcy can be filed every 8 years.