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An additional purpose of bankruptcy law is to allow certain debtors
to free themselves (to be discharged) of the financial obligations
they have accumulated, after their assets are distributed,
even if their debts have not been paid in full.
There
are two basic types of Bankruptcy proceedings.
A filing under Chapter 7 is called liquidation.
It is the most common type of bankruptcy proceeding.
Liquidation involves the appointment of a trustee
who collects the non-exempt property of the debtor,
sells it and distributes the proceeds to the
creditors.
Bankruptcy
proceedings under Chapters 11, 12, and 13 involves
the rehabilitation of the debtor to allow him
or her to use future
earnings to pay off creditors. Under Chapter 7, 12, 13, and
some 11 proceedings, a trustee is appointed to supervise the
assets of the debtor. A bankruptcy proceeding can either be
entered into voluntarily by a debtor or initiated by creditors.
After a bankruptcy proceeding is filed, creditors, for the
most part, may not seek to collect their debts outside of the
proceeding.
The
debtor is not allowed to transfer property that
has been declared part of the estate subject to
proceedings.
Furthermore, certain pre-proceeding transfers of property,
secured interests, and liens may be delayed or invalidated.
Various provisions of the Bankruptcy Code also establish
the priority of creditors' interests.
Our
firm represents both individuals and commercial
clients in any of the above bankruptcy proceedings.
For individuals, a
“no money down” option is available in certain circumstances.
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