Bankruptcy was originally designed to help the creditor, not the debtor. During the middle of the 1500’s, the creditor brought forth bankruptcy proceedings against the debtor to have them punished in some way. Since executions, slavery, and other forms of what is now consider barbaric punishment was no longer used as punishment, debtors’ prison was the punishment of choice in that era.
Today, the focus for bankruptcy is on protecting the debtor from the creditor in a variety of ways through different bankruptcy types. The debtor files for bankruptcy using lawyers like the law offices of Ledford & Wu Schaumburg to eliminate or restructure their debt. Chapters 7, 11, and 13 are the three most common types of bankruptcy filed for personal or business purposes.
Chapter 7 – This bankruptcy is considered a liquidation bankruptcy. It allows you to have all your debt discharged at one time. It’s intention is to eliminate medical bills, credit card debt, and other kinds of bills you cannot pay.
Chapter 11 – This form of bankruptcy, also referred to as reorganization bankruptcy is for businesses and investors. The party that owes money to various creditors agrees to repay their loans and debt over an agreed upon period of time with some modification of amounts owed in many cases.
Chapter 13 – Chapter 13 is also known as the wage earners bankruptcy. It’s a personal reorganization bankruptcy for individuals. All debt is consolidated into one payment and anything that’s left after 36 to 60 months is discharged. You pay a portion of your debt and sometimes all of it depending on the agreement. It stops foreclosures, wage garnishments, and repossessions.
Bankruptcy in these modern times is designed to protect your property and money. No debtor can take possession of exempt property in these cases. This also allows you to rebuild your credit over time since bankruptcy remains on your credit record for only 10 years.
The current economic situation has driven more people to bankruptcy. This process no longer holds the negative stigma it used to making it a viable solution to start over for any person or business that needs it regardless of the reason. The law offices of Ledford & Wu Schaumburg have bankruptcy lawyers on staff to help you no matter what your bankruptcy needs. Visit website