What Is Bankruptcy?

Bankruptcy, is a status usually established by a financial court for individuals or organizations that are not able to pay back their debts. Most of the time the petition of a bankruptcy is initiated by the struggling debtors themselves. In United States, the act of bankruptcy is regulated by the constitution and federal law. However there are certain areas of bankruptcy laws that are affected by state laws so it is hard to speak of bankruptcy rules generally in a federal manner. There are different rules and options available to residents of different states. As a general sense, by declaring bankruptcy, a debtor obtains relief from their outstanding debts either by dischargement or reorganization of the debts.

Bankruptcy cases usually aim two things, to give the debtor a fresh start and help through financial hardship, and pay back creditors accordingly by either restructuring payments or liquidation of assets. In most cases the bankruptcy petition is filed through different bankruptcy chapters. In chapter 7 bankruptcy, the case involves liquidation of property to distribute payments, whereas chapter 13 bankruptcy you are required to submit a payment plan and keep your properties. Chapter 11 bankruptcy involves organizations and companies to propose a plan in their form of paying back credit.

At Bankruptcy Safe, we provide all the required information involving all the bankruptcy chapter codes available to filing in the United States. You can also find general financial and bankruptcy tips on our blogs, that you can use to consider your own cases.

What Happens After Bankruptcy?

Most people concentrate a lot more on what happens after you go through the bankruptcy procedures than the filing itself. We will try to touch on these issues as well. Popular questions include what happens to your home loans or your ability to receive mortgages after bankruptcy, or credit cards after bankruptcy and if you can receive any of them, outcome about your student loans and generally how bankruptcy affects your credit rating. These are all really concerning issues because your financial stability is a central factor in the happiness of your life. Try not to panic too much about after bankruptcy. Our articles on each issues could be a good starting point for you to learn more about your options.