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What is Personal Bankrtupcy law?

Bankrupcy Laws

I am going to limit this article about Bankruptcy law to just those laws the United States government offers to help people who are not able to repay their debts. I will divide the article into two parts.

The first part includes laws that help people become debt free. It allows them to get a new start. These laws are found in the chapter seven of the rules that bankruptcy courts and judges use. The court might take back some of the things the debtor cannot afford. These things can be returned to the person they were bought from or sold to help pay debts. There are rules which allow people to keep most of the things they have and need. Other articles in this series will explain chapter 7 bankruptcy rules better. These articles will help you discuss bankruptcy with a bankruptcy attorney.

The second part of this article talks about rules in chapter 13 of the bankruptcy code. These are laws that help people repay old debt and start a budget to keep up with remaining bills. Some things we buy on credit can be taken back by the seller if payments are not made. These debts are called “secured,” because the thing purchased can be taken back to secure the debt. Bankruptcy rules in chapter 13 allow debtors to return those things they wish to give up and cannot afford. It also lets them keep other items and make payments.

Items which are not “secured” are called unsecured. In chapter 13 bankruptcy all secured debt is either paid for or returned. The debtor then makes a budget which includes all necessary expenses and the monthly payments for the secured items. Money left over after all expenses are paid can be divided up to pay the unsecured debts. There is usually not enough to pay all of the unsecured debt. Sometimes only pennies on the dollar can be paid. If the bankruptcy court approves this budget and the debtor follows it, all the unpaid unsecured debt is forgiven at the end of his plan. Most cases keep the plan in place for three to five years.

    Some important things to remember are:
  1. Some debts cannot be done away with by bankruptcy.
  2. Many bankruptcy rules are complicated.
  3. Mistakes can be costly.
  4. Wise use of the U.S, Bankruptcy code can help organize debt and give debtors a fresh start.
  5. 5. It’s a good idea to consult a bankruptcy attorney for help, if you are considering bankruptcy.

A bankruptcy lawyer at the Portsmouth office of The Alliance Legal Group in Portsmouth, Virginia, can help you learn more about your rights regarding bankruptcy and debt relief. For more questions or to schedule your free bankruptcy consultation with one of our skilled bankruptcy attorneys, contact us at 757-447-4086 or at netlegal@call54legal.com.

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