Filing for bankruptcy is a major decision, and you should fully understand your legal rights before making this big decision. Most people who file for bankruptcy do so as a last resort to receive a “fresh start” or “new beginning.” During bankruptcy, a federal bankruptcy court will discharge some of your existing debts and restructure any remaining debts. Bankruptcy law is a complex area, and at the very least, you should understand the common terminology used during the process.
Unlike a few other states, Virginia does not have a separate state bankruptcy process. As such, you will be subject to only the federal bankruptcy laws. You can review the rules governing the Federal Bankruptcy Process here.
Debtor: As the person filing for federal bankruptcy protection, you are the debtor. You are the individual or company owing money or property to other individuals or companies.
Chapter 7: Often referred to as a liquidation bankruptcy or straight bankruptcy, a person filing for Chapter 7 most likely has few or no assets. In other words, if you do not have enough money or property to pay your debts to unsecured creditors, you will probably file for Chapter 7.
Chapter 11: If you are hoping to reorganize your financial affairs, you should consider filing for Chapter 11. Either an individual or business can file for Chapter 11. You will have a set amount of time to reorganize and repay your debts under a reorganization plan.
Chapter 13: Only available to individuals with a stable source of income, Chapter 13 bankruptcy may be a good option to avoid certain consequences of nonpayment of your debts, including mortgage foreclosures. Your debts must not exceed a certain amount.
Bankruptcy Trustee: A bankruptcy trustee is a court-appointed individual or corporation that has the power to settle your estate on your behalf and for the benefit of your creditors.
Contact Us Today
Let us help you understand the bankruptcy process and federal bankruptcy laws. Contact our Fairfax County office today to schedule an initial consultation, For a case evaluation, call Keithley Law, PLLC, PLLC at (703) 454-5147.