WHAT IS A BANKRUPTCY?

The right to file a bankruptcy exists under the law, and this law was designed mainly to take care of serious problems with debts and to allow a fresh financial start.

A straight bankruptcy proceeding includes a court administered sale of any of the debtor's property that does not fall under the exemption described below, with distribution of the sale proceeds to the creditors (persons whom the debtor owes).

The result of a successful bankruptcy proceeding is a discharge in bankruptcy, which releases the debtor from payment of affected debts.

Most of the information in this pamphlet deals with a straight bankruptcy proceeding.

There is also a special type of bankruptcy, called Chapter 13 bankruptcy.

It is also sometimes referred to as a "wage-earner plan," although it is available to persons on welfare or with other kinds of regular income.

In a Chapter 13 plan, a person continues to pay off debts under an installment payment plan administered by a trustee.

There are some advantages of Chapter 13 in dealing with secured creditors, such as mortgage companies and banks, who might otherwise repossess property of the debtor.

And, a Chapter 13 plan may extend the time to pay off debts and reduce the amount to be paid.

The plan suspends legal and collection actions against the debtor for the period it is in effect, which is usually three or five years, and it may also suspend such actions against
persons who co-signed loans with the debtor, such as friends or relatives.

We can help you file for bankruptcy. Call 706-935-2201 now for a free consultation.