The tale of the mighty Automatic Stay in bankruptcy cases!

The Automatic Stay is a powerful legal tool that comes into play the moment a bankruptcy petition is filed. It’s like a legal force field that protects debtors from the unrelenting onslaught of creditors who seek to collect their debts by any means necessary.

Imagine, if you will, a debtor drowning in a sea of debt. The creditors are like sharks circling around, ready to pounce at the first sign of weakness. But fear not, for the Automatic Stay is here to rescue our debtor from certain doom.

With the Automatic Stay in place, all collection activities must come to a screeching halt. Creditors are prohibited from calling, sending letters, or taking any legal action against the debtor. No more incessant phone calls, no more threatening letters, no more sleepless nights.

But wait, there’s more! The Automatic Stay also puts a stop to any ongoing lawsuits, repossessions, foreclosures, and wage garnishments. That’s right, the Automatic Stay is like a legal superhero, swooping in to save the day and give the debtor a fighting chance to get back on their feet.

Of course, like any superhero, the Automatic Stay is not invincible. There are some exceptions to its power, such as certain criminal proceedings or actions by the government to collect taxes. But for the most part, the Automatic Stay is a potent shield that can give debtors the breathing room they need to reorganize their finances and get a fresh start.

So, in conclusion, I implore you to embrace the Automatic Stay as a powerful legal tool that can save debtors from the clutches of their creditors. Let us all raise our glasses and toast to the Automatic Stay, defender of debtors, champion of justice!

If you find yourself drowning in debt and struggling to keep up with your financial obligations, don’t despair. The Automatic Stay in bankruptcy cases can be a powerful tool to protect you from the harassment of creditors and give you the breathing room you need to get back on your feet.

To learn more about how the Automatic Stay can help you, I encourage you to schedule a free telephone consultation with Attorney Irby at 256.882.2222 or by using the appointment scheduler link found on Bankruptcy.Solutions. With his years of experience in bankruptcy law, Attorney Irby can help guide you through the process and help you achieve a fresh start.

Don’t let debt continue to control your life. Contact Attorney Irby today and take the first step towards financial freedom.

If you are in debt, you are not the only one. In fact, last year Americans accumulated about $90 billion in retail credit card debt alone. If you are having difficulty getting out from beneath a mountain of bills, you might consider filing for bankruptcy.

At Bankruptcy Solutions, I can help you to decide on whether to file for Chapter 7 or Chapter 13. Once you are feeling more secure, I can teach you how to improve your credit report so that your creditors might view you more favorably.

I proudly serve the needs of clients in the Huntsville area and throughout Jackosn COunty and Northern Alabama.

The Difference Between Chapter 7 and Chapter 13

It is not an easy decision to file for bankruptcy, especially if you are unsure of what it will mean for you in the future. In actuality, there are several kinds of bankruptcy cases. Two common types are Chapter 7 and Chapter 13, and both of them stay on your credit report for 10 years.

Chapter 13 Bankruptcy

In general, a Chapter 13 bankruptcy claim means that you are consolidating all of your debt into one large amount and then paying it down a little at a time over 3-5 years. If you believe that you might be able to tackle your debt this way, I have the experience to help you make it happen.

Filing for Chapter 13 bankruptcy may allow you to keep your secured assets, such as your car or your home. The expectation; however, is that you will continue to make the agreed-upon payments in good faith.

Chapter 7 Bankruptcy

With a Chapter 7 bankruptcy, your credit report will note the bankruptcy and show that you have a zero balance on all of your unsecured debts. However, if you own a vehicle or a home, it may have to be sold to pay some of your creditors.

One key aspect of a Chapter 7 bankruptcy filing is that you can only file for it once every eight years. Additionally, if the Huntsville courts decide that you may qualify for a Chapter 13 payment plan instead, they might not let you have a Chapter 7.

At Bankruptcy Solutions I can take a look at your financial information and evaluate your chances of being granted either a Chapter 7 or a Chapter 13. Based on my years of experience with bankruptcy law, I will likely have other suggestions for you for rebuilding your credit.

Improving Your Credit Report

After you have successfully filed for bankruptcy, you might think about rebuilding your reputation with creditors. However, considering that a bankruptcy stays on your credit report for 10 years, you probably don’t know where to start.

When Bankruptcy Solutions takes your case, I will give you access to the credit improvement system, “7 Steps to a 720 Credit Score.” Although it is valued at $1,000, you can qualify to get it for free. The system will provide helpful information, including the following subjects:

• Credit reports and scores
• Quick credit strategies
• Re-establishing credit with card companies

In Alabama, the average credit score is 680. Credit reporters list a perfect score as 850. If you follow the 7 steps, you may be able to stay out of debt and improve your credit rating to well above the average score in the state.

Contact Bankruptcy Solutions About Your Credit Issues

Because bankruptcy is a complicated area of law, it is generally wise to consult with an attorney who focuses on it. At Bankruptcy Solutions, I spend most of my time on Chapter 7 and Chapter 13 bankruptcies. I’m available to assist clients in Jackson County and throughout Northern Alabama. If you contact my office in Huntsville, we can discuss whether either type of bankruptcy is right for you. Then we can talk about rebuilding your credit so that you’ll have a strong credit report in the future.

Declaring bankruptcy can be a tough decision to make. At this point, lots of questions are running through your mind. Will I lose my car or house in the process? Will the bankruptcy trustee take my property? I understand how difficult it can be to make a decision like this. If you’re thinking of filing for bankruptcy, contact my law firm, Bankruptcy Solutions, in Huntsville, Alabama. I will provide suitable answers to all your questions and concerns about what to expect.

What to Expect When Filing for Bankruptcy

If you’re thinking of filing for bankruptcy, you probably have a lot of questions about what to expect. However, what to expect depends on the type of bankruptcy you file for. In Alabama, you have the option of filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 is the most common form of bankruptcy. It offers you the opportunity to wipe out your unsecured debts and get a fresh start. Here, the trustee will collect all your property and assets and sell any of the assets that are not “exempt” (often, the exempt items you can keep include your car, home, furniture, clothing, household appliance, and related possessions). After selling your non-exempt assets, the trustee will pay you and the debtor.

Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy in Alabama involves setting up a payment plan to pay down your debt. Under Chapter 13, you can propose a repayment plan of 3–5 years to the creditor, with an offer to pay off part or all of the debts using your future income. The debt payments will be structured in the best possible way to pay down the debts. However, you must have a “regular source of income” to file Chapter 13.

Figuring out which chapter of bankruptcy to file for can be confusing without proper guidance. As an experienced bankruptcy attorney based in Huntsville, Alabama, I can review your case to help you determine whether you qualify for Chapter 7 or Chapter 13.

What Happens To My House If I File For Bankruptcy?

Your House in Chapter 7 Bankruptcy

If you file for Chapter 7 bankruptcy, you will be allowed to keep your house under two conditions:

• You are up-to-date with your mortgage payments.
• The house qualifies for assets that are “exempt” under Alabama bankruptcy law.

You are likely to lose your house if you have already fallen behind on your mortgage payments. However, you may be able to stay in your home for one or two months. To learn more about whether you can keep your house through the bankruptcy process, I urge you to contact Bankruptcy Solutions as soon as possible.

Your House in Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows you to set up a payment plan to pay down your debt. If you file for Chapter 13, you will not lose your home, even if you are behind on your mortgage payments. Rather, provided that you keep up with your payment plan, your home cannot be foreclosed by the lender.

What Happens To My Car If I File For Bankruptcy?

Your Car in Chapter 7 Bankruptcy

As with a house, you can keep your car after filing for Chapter 7 if:

• You are up-to-date with your car loan payments.
• The car qualifies as an “exempt” asset under Alabama state law.

After you file for bankruptcy, some lenders will allow you to continue making payments on your auto loan. In a few cases, you may need to “reaffirm” the car loan debt by agreeing to a new contract.

Your Car in Chapter 13 Bankruptcy

You are very likely to keep your car if you file for Chapter 13. With your established payment plan through Chapter 13, you can catch up with your overdue auto loan payments. Also, you can decide to stretch the auto loan payments over an extended period.

Why You Need a Bankruptcy Attorney

If you are considering bankruptcy, know that you’re far from alone. In 2018, Alabama had the highest bankruptcy filing rate in the nation. As of March 2019, the state had 529 bankruptcy filings per 100,000 residents. Those residents didn’t have to navigate the bankruptcy process alone, and neither do you. When you find yourself in financial distress, you need the help of a qualified bankruptcy attorney who you can trust. I will explain your options and give you the legal advice you need.

In addition, when you work with me on your bankruptcy, you will get free access to a comprehensive credit counseling course (valued at $1,000) called “7 Steps to a 720 Credit Score.” The course will teach you quick and easy ways to drastically rebuild your credit score. With this, you can have a great credit score within one or two years.

Experienced Bankruptcy Attorney in Huntsville, Alabama

If you are facing financial hardship and considering filing for bankruptcy, contact my law firm, Bankruptcy Solutions, today. Using my trusted two-part approach, I will provide you with useful legal advice on how to discharge your debt and rebuild your credit score. My firm serves clients in Huntsville, Jackson County, and other areas in Northern Alabama.

Many people today choose to file for bankruptcy so they can to wipe their debt clean, even though bankruptcies in America have slowly reduced since 2010, according to a study reported by The Ascent, an online money managing concierge. Once the bankruptcy has been officially filed, this prohibits any debt collectors or creditors from contacting you.

I understand how stressful it can be to make the difficult decision to file for bankruptcy. If you’re still being contacted to pay your debts, that can only add to the stress you are already experiencing. Creditor harassment after bankruptcy is illegal, so if this is happening to you, contact my office in Huntsville, Alabama to take control of the situation with the help of an experienced attorney.

At What Point in the Process Should Communication Stop?

When you filed for bankruptcy in Huntsville, Alabama, there are two terms that you may have heard of that are essential to remember: general discharge and automatic stay.

• General discharge is the final “okay” signaling that you have correctly completed the bankruptcy process and begins the temporary period when debt collectors can no longer reach out to you, including call, email, post, text, and in-person.
• An automatic stay is an injunction that makes it illegal for creditors or bill collectors to contact you in any way. One way they can circumvent this rule is if their contact has been permitted by the bankruptcy court.

Automatic stays begin their run almost immediately after you have completed your bankruptcy filing. Depending on the firm, some debt collectors may not have software that receives the notice of general discharge immediately.

Over time, you will see a decrease in the number of people trying to contact you, however, this ban will not last forever.

How Long Does Automatic Stay Last?

The length of time that your automatic stay is in effect depends on your case. The stay remains activated until the petition for your bankruptcy is dismissed or if a federal judge grants relief to a creditor, but a creditor must first file a motion for this to happen.

Why Could an Automatic Stay Be Lifted?

Under rare circumstances, the court may file a motion to allow bill collectors to resume reaching out to you for money, for example:

• Home mortgage lenders know your property is of significant value and is uninsured
• You have defaulted home mortgage payments
• A partial stay may be granted allowing for the necessity of divorce, excluding property division
• A bank may be allowed to proceed with foreclosure if there’s no equity in the property and it was not part of the reorganization of debt

Automatic stays are not often lifted, however, if they are, you have the right to be notified and take part in a hearing. Federal bankruptcy judges have 30 days to set a preliminary hearing for the motion to lift, and an additional 30 days to set a final hearing.

Let An Alabama Attorney Fight Against Your Creditors

If a debt collector has violated an automatic stay by contacting you or you were not notified of a motion or hearing to lift the automatic stay, contact my Huntsville, Alabama law firm — Jeffrey B. Irby, P.C. — immediately so I can help you stop calls from bill collectors.

For more than 20 years I have witnessed clients experience great stress and emotional strain as they go through the process of bankruptcy. On top of that, bill collectors who are illegally contacting them can make their stress even worse. I am here to help relieve that stress; let my extensive experience as a bankruptcy attorney do the heavy lifting so you can focus on reaching financial independence once again.

My office in Huntsville, Alabama has clients from all over Madison and Jackson County and Northern Alabama.

Schedule a free consultation today by calling or filling out the form below.

WHAT IS THE END GOAL FOR BANKRUPTCY?

When you are making the difficult decision to file for personal bankruptcy, it is important to understand the purpose and the end goal for the bankruptcy process. Filing for bankruptcy does not have to be a permanent scar on your economic record—there are steps you can take to reach a better future with a more solid financial footing. In this post, I will help you understand bankruptcy, the end goal of the process, and possible solutions for long-term freedom from debt.

Bankruptcy Statistics in Alabama

There are many reasons to feel very proud to be an Alabama resident, but there are also harsh realities faced by many individuals and families here in our state. According to a study conducted by the American Bankruptcy Institute, Alabama’s rate of Chapter 13 bankruptcy filings (65%) is the second-highest in the country, trailing only Louisiana (70%).

These sobering figures only serve to emphasize the importance of not only understanding bankruptcy but also keeping an end goal in mind as you go through the process.

The Purpose of Bankruptcy

Bankruptcy is not designed to be a black mark that you carry with you to feel shame about your financial situation. Instead, bankruptcy is a process to help eliminate the financial risks you are up against in your life and eventually help you reach good financial standing again. These financial risk elements can include:

• Liens
• Wage Garnishment
• Personal Debt

The Constitution gives Congress the power to regulate commerce and bankruptcy, and federal courts are actually designed with the intent to help individuals who are going through bankruptcy. Finding a solution to your debt situation will get you started on the right path.

Long-Term Debt Solutions

The best way to work toward a more sound economic future is to come up with an effective plan to achieve both relief from your current debt as well as avoid debt long-term. As an experienced bankruptcy attorney, I have been guiding my clients and helping them put such plans into place for years. My process for navigating through bankruptcy consists of:

• Evaluating your current financial concerns and “risks”
• Exploring the available solutions, including Chapter 7 or Chapter 13 bankruptcy
• Creating a long-term plan that suits your unique situation
• Most importantly—helping you follow through on your plan!

Filing for bankruptcy and working your way back to stable financial footing isn’t a process that happens overnight. It takes time and discipline, but it is possible if you stop putting off the things you need to do to make it happen. Meeting with a bankruptcy attorney to discuss your options is the first step.

How a Bankruptcy Attorney Can Help

When you come to me with your financial problems, I will sit down with you and learn the details of your situation. No two clients are exactly the same, and everyone has a different story. It’s part of my job to learn about you and your story so I can help you put together a plan to get your life headed in the right direction. Even if you feel overwhelmed by your debt, having a Huntsville-based bankruptcy attorney in your corner to guide you through the state and federal court systems can make a big difference.

Bankruptcy Attorney Serving Huntsville, Alabama

If you are in the Huntsville area of Alabama and are facing a financial crisis, you need to know that there is hope for a more positive future. I make it part of the mission of my law practice to help individuals and families climb out of deep debt, reclaim their lives, and put their finances back on the right track. I can explain your options, advise you whether or not bankruptcy is a good option for your situation, and guide you throughout your case. To take steps toward a brighter financial future, contact me, Jeffrey B. Irby, P.C., and schedule a free consultation.

When faced with financial crisis, many people make the mistake of assuming bankruptcy is their best — or only — option to remedy their problems. While bankruptcy is sometimes the eventual result, it may not be necessary. I’m here to both break down bankruptcy and present some possible alternatives you may be able to take advantage of in your effort to get your finances back on the right track.

Bankruptcy

Bankruptcy typically becomes an option when an individual or business ends up in such a large amount of debt that they are unable to dig their way out, resulting in the selling off of assets to eliminate their debt. Bankruptcy for individuals can be divided into two categories:

• Chapter 7 Bankruptcy — This is the more traditional form of bankruptcy, involving surrendering your assets and property to pay off your debts to creditors. After giving up your assets and property, you are permanently relieved of your outstanding debt. However, eligibility for Chapter 7 filing is income-based. If your income is not low enough, you will instead have to file Chapter 13 bankruptcy.
• Chapter 13 Bankruptcy — This option of bankruptcy involves setting up a payment plan to pay down your debt, rather than eliminate it entirely in one motion. This can be accomplished by either eliminating a portion of your debt and leaving you with more manageable payments, or by structuring your debt payments in a way that will make paying down the debt more easily achievable.

Facing the possibility of filing for bankruptcy can feel discouraging, but if you’re in a deep financial hole, you need to know that bankruptcy may not necessarily be your only option. There are alternatives.

Alternatives to Bankruptcy

Before making the decision to file for personal bankruptcy, here are a couple of alternatives I want my clients to consider:

• Negotiate with Your Creditors — Some creditors are willing to work with you on your debt
• Sell Off Assets — Selling off an extra car or downsizing your home can relieve debt
• Credit Counseling Services — There are services available to help you manage your debt

It is my preference to avoid having my clients file for bankruptcy unless they have at least $10,000 in unsecured debt. If your debt is less than $10,000, I would likely advise you that filing for bankruptcy is not in your best interest.

For my clients, I offer something no other bankruptcy attorney in the northern Alabama area will offer — free access to an online course called 7 Steps to a 720 Credit Score. This course provides you with education on how to deal with your debt and improve your credit to receive lower interest rates moving forward. This course normally costs $1,000, but I provide it to my clients for FREE. This can be a tremendously valuable tool to take advantage of when looking to get your life back financially.

Why You Need a Bankruptcy Attorney

In 2018, the state of Alabama had the highest bankruptcy filing rate in the country — 542.8 for every 100,000 residents. That’s a lot of our fellow Alabama residents who find themselves in deep financial trouble. Filing for bankruptcy may be the eventual best course of action, but there may be other options for you. When you find yourself in what feels like a bottomless financial pit, you need the help of a skilled attorney you can trust. Whether you decide to file for bankruptcy or choose to go another route, I can help you chart the right course.

Bankruptcy Attorney in Huntsville, Alabama

As a Huntsville-based bankruptcy attorney, I spend a lot of my time meeting with people who have found themselves in very serious financial situations for one reason or another. If you find yourself confronted with the prospect of having to file for bankruptcy, don’t feel like you’re out of options or without help. I can be right there with you to take you through the process step by step. Don’t lose hope — put a dedicated bankruptcy attorney on your side. If you need legal advice regarding your financial situation, call me, Jeffrey B. Irby, P.C., and schedule your free consultation at my Huntsville office today.

As a Huntsville area bankruptcy lawyer, I see people throughout northern Alabama ask three very understandable questions when the idea of filing for bankruptcy comes up:

• Isn’t bankruptcy a bad thing?
• Why should I even consider bankruptcy as an option?
• How much debt do I need to have to qualify for bankruptcy?

Let’s cut right to the chase. “Bankruptcy” is a scary word to most because they associate it with financial failure. In truth, though, the bankruptcy process only exists to give everyday people the power and the means to eliminate crippling debt from their lives. Don’t think of bankruptcy as a sign of defeat. Think of it as a tool to get a well-deserved fresh start.

As for how much debt you need to qualify for bankruptcy, there is, unfortunately, no magical number that fits every situation. Each case is unique, and the best way to know for sure whether bankruptcy is a route worth pursuing is to schedule a free one-on-one consultation with a local attorney. Generally speaking, I advise my clients against bankruptcy if their unsecured debt (that is, credit card bills, medical bills, personal loans, and other debts not tied to property) add up to $10,000 or less.

So, How Do I Know If I Should File for Bankruptcy?

As I’ve already said, bankruptcy is nothing to be ashamed of — especially if you, like so many others, came to feel your financial strain because of something outside your control. To put things in perspective, consider this: a 2019 CNBC report revealed that approximately two-thirds of bankruptcy filers cited unpaid medical bills as the leading cause of their financial issues. Many others cited foreclosure, financially assisting others, and divorce as their top contributors.

Regardless of the events that led to your debt, the most important thing now is getting proactive about beating it. If any of the following scenarios applies to you, bankruptcy may be a solution worth exploring further:

• You have over $10,000 in unsecured debts, such as credit card debt, unpaid medical bills, or personal loans
• You’re being sued by a creditor or bill collector
• You’re facing foreclosure
• You’re behind on car payments or your vehicle is subject to possible repossession

Heavy debt is one of the leading stressors in Alabama today, but you can make a choice here and now to attack it head-on rather than letting it control your life. I encourage you to take advantage of a free consultation with me if you’re seriously considering the possibility of filing for bankruptcy. After reviewing your specific situation, I’ll explain your best options so you can start taking steps toward a debt-free future.

Huntsville, Alabama Debt Relief Solutions

At my law firm, Jeffrey B. Irby, P.C., we like to think of our approach to debt relief as a two-part service. Part 1 is strictly about discharging your debt (that is, eliminating your debt) whether it’s through Chapter 7 bankruptcy, Chapter 13 bankruptcy, or another debt relief solution. Part 2 is all about rebuilding your credit score so you can get lower interest rates in the future.

Though the second part of this mission isn’t a bankruptcy requirement in the state of Alabama, I believe that my clients deserve every advantage to not only get past their current debt, but to rebuild their credit and learn how to avoid such situations in the future. For these reasons, I offer my clients a credit counseling course called “7 Steps to a 720 Credit Score” — a $1,000 value that I provide free of charge.

If you live in northern Alabama and are feeling overwhelmed with debt, please don’t hesitate to give my office a call. It would be my pleasure to sit down with you and discuss whether filing for bankruptcy is the right option for you.

Filing for bankruptcy can be a necessity for some who have gotten too deep into debt or have more expenses than they can keep up with. While it can be portrayed as a get out of jail free card, the process for filing is complex and it leaves a very large blemish on your credit report. However, if bankruptcy is your only option, be very careful about your financial decisions in the days leading up to your filing. Here are some of the worst things you can do right before you file:

• Take out new lines of credit – Someone looking to cheat the system might open up and max out credit cards just before their bankruptcy, assuming that this new debt will be discharged and they won’t be held responsible. If you take out loans or use your credit excessively, it will be glaringly obvious what your intentions are. The point is, it just looks bad and you do not want to do this.
• Stop communicating with your creditors – You might be tired of receiving calls from your creditors day after day, but communicating with them is essential if you are planning to file for bankruptcy. Ignoring your debt could mean that actions are being taken against you without your knowledge, like wage garnishments or tax liens. These matters can further complicate your bankruptcy case, so make sure you let your creditors know of your plan to file.
• Stay in the dark about your finances or provide wrong information – One of the many pieces of paperwork you’ll be asked to fill out when filing for bankruptcy is information about your income, your expenses, and who you owe money to. If you aren’t aware of these figures, it makes everyone’s job much harder. When completing this information, willfully manipulating or falsifying the data could result in criminal charges.
• Make last minute transactions to try to improve your situation – If you have assets to sell or private loans to repay, the last thing you want to do is take action on these items right before you begin your bankruptcy case. Both of these behaviors can be looked upon as a preferential transfer, meaning you attempted to pay back a specific family member or creditor over all of the others. Not only could you face criminal penalties for doing this, but the court could actually sue whomever you paid and ask for the money back.

Filing for bankruptcy is not something to be taken lightly, and there are a lot of questions that come up during the process. At Bankruptcy Solutions with Jeffrey Irby, we will work with you step by step through your case to ensure you get the fresh financial start you deserve.

“Your bankruptcy is dull compared to what is going on in the world, and it won’t make the nightly news.”

P.T. Barnum was an American politician, showman, and businessman remembered for the Barnum & Bailey Circus.

In 1856, after making a series of loans to help developa city in Connecticut, Barnum was forced to declare bankruptcy. The litigation lasted four years, during which time more than a few people celebrated his downfall. The poet and essayist Ralph Waldo Emerson even went so far as to say that Barnum’s comeuppance was “the gods visible again.”

Of course, when Barnum was in his sixties, he became known as a circus king. He began speaking against those who made money through fraudulent deceptions, even testifying against William H. Mumler, the photographer who supposedly took photographs of ghosts, including one of Mary Todd Lincoln with her deceased husband, Abraham Lincoln.

My point is this: The word “bankruptcy” is packed with all sorts of negative emotional triggers. It sounds dirty. It’s embarrassing. Just look at what P.T. Barnum went through.

But the reality is this: Unless you are famous or otherwise embroiled in something deceptive, your friends and family will most likely not nd out about your bankruptcy, unless you decide to tell them. Your parents and next door neighbor will very likely never run a background check. Your bankruptcy is dull compared to what is going on in the world, and it won’t make the nightly news.

But even if your bankruptcy does somehow become common knowledge, it is not the end of your story, noris it the end of your reputation. What you do after your bankruptcy will be so much more important than the fact of declaring bankruptcy. If you show your family and your friends that you are a changed person, they will be impressed with you. They will see that you turned your financial misfortune into wisdom.

As did P.T. Barnum. No one remembers his bankruptcy. They remember that he brought wonder, magic, and happiness to their lives.

Filing for bankruptcy can sound like a very intimidating and complex process, but in reality, it can be a true lifesaver for both businesses and individual consumers. If you or your company have gotten in over your head with debt and aren’t able to keep up with your day-to-day expenses, choosing to file for bankruptcy might offer some light at the end of the tunnel just when things seem darkest.

There are a number of different types of bankruptcy available to both businesses and individuals, but most forms will seek to manage your insolvency by means of either reorganizing or liquidating some or all of your debts.

Reorganization

When it comes to resolving your debts, reorganization tends to be the preferred method for businesses and individuals alike. Instead of completely closing down, a company can file for Chapter 11 bankruptcy, which means they want to fulfill their obligations to their creditors while still remaining a fully functioning business.

Chapter 11 is based upon reorganization, which means the businesses’ finances will be restructured to include payments to their debtors. If the company was having trouble meeting payroll needs, or had other challenges in addition to paying their bills, reorganization will allow for a complete overhaul of their cash flow. Ultimately, this option is beneficial for all parties involved, as the company is allowed to keep their assets while continuing to stay open, and debtors receive the money they are owed.

Reorganization works similarly with individuals, and is completed under Chapter 13 of the US Bankruptcy Code. Much like a company who wants to keep its assets, a person filing for bankruptcy usually wants to keep their home or car. Chapter 13 will allow them to create a repayment plan with the guidance of the court, and they will be able to resolve their debts while maintaining possession of their property.

Liquidation

Some situations find that a different type of bankruptcy works better, depending on the amount of debt and ability to reorganize. In this case, liquidation is the method that debtors would use to recover any losses from a business or individual. This option, called Chapter 7, takes an inventory of debts owed and then requires the business or individual to begin selling their assets to cover their balance due.

This option often times leaves a company with nothing left, and can put an individual in a difficult place of relinquishing home ownership or any savings they had accumulated. Debtors often come out of a liquidation in a less than favorable position as well, as the debts they are owed typically far exceed the assets a person has available to sell.

However, some people find that due to low income or other circumstances, paying back their debts would be impossible. It’s in this case that liquidation is the only option realistically available to them.

If you are thinking about filing for bankruptcy and aren’t sure what your first steps should be, contact Bankruptcy Solutions today. We will answer all of your questions and help create a plan that works best for you.