What Is Bankruptcy Protection?
When an entity; be it an individual or a business finds itself unable to make payments to their creditors they have the option to file for bankruptcy protection. For the individual, filing for bankruptcy in Royal Palm Beach can involves liquidation of their assets and the eventual cane]collation of the majority of their debt, they also may develop a structured plan that will allow them to keep their assets and pay down the debt over a period of time. In the case of a company, bankruptcy protection can provide full or partial debt relief and contracts; this assumes the business has the intention of continuing to operate. The business also can cease trading and sell all the assets in an effort to pay the debt.
Individuals who declare bankruptcy in Royal Palm Beach will usually opt for either Chapter 7 or Chapter 13. Chapter 7 is usually thought of as “straight bankruptcy” or liquidation. In this case the court assigns a trustee to the case, the trustee’s role is to control the assets of the bankrupt as well as liquidate them and give the proceeds to the known creditors in order to eliminate the debt to the extent possible. In Chapter 7 the individual can keep some assets, there are also some debts that cannot be cancelled through a declaration of bankruptcy.
Chapter 13 bankruptcy on the other hand is thought of as “wage earner bankruptcy.” This type of bankruptcy allows the individual to develop a plane to repay their debt, interest free, over a period of time. The plan and the time frame must be agreeable to the court. While the individual is in Chapter 13 bankruptcy he or she is protected from any creditor attempting to seize the asset or collect on the debt, the creditors are under an obligation to abide by the court approved reorganization plan. With Chapter 13 bankruptcy in Royal Palm Beach the debtor will keep his or her assets but anyone who has declared either Chapters 7 or 13 will find it extremely difficult to obtain any decent credit for as long as 10 years after first seeking protection.
Businesses can also avail themselves of Chapter 7 as well as Chapter 11. Chapter 11 bankruptcy protection is reorganization, not a liquidation of assets. As in Chapter 13 for individuals, the business must propose a repayment plan to be fully satisfied in a certain time frame. If the business is publically traded the stock can no longer be traded once bankruptcy has been declared.
Regardless of what your financial position is there will be a way to declare bankruptcy in Royal Palm Beach. To discuss the full impact of bankruptcy you are invited to contact the Law Offices of Sean I. Koplow.