Bankruptcy Attorney or Lawyer, Definition, Types and Examples, the word Bankruptcy is the legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common. All of the debtor’s assets are measured and evaluated, and the assets may be used to repay a portion of outstanding debt.
Bankruptcy Attorney Definition
Bankruptcy is a complex legal process that is filed and litigated in the United States Bankruptcy Court. A bankruptcy attorney is a lawyer that specializes in the bankruptcy process, having knowledge about the various types of bankruptcy, filing the required documents with the court, and issues with creditors. Most bankruptcy lawyers handle either consumer (personal) bankruptcy, or commercial (business) bankruptcy. While the largest part of the bankruptcy process involves paperwork, notifying the appropriate people, and other administrative tasks, it may also involve litigation, when creditors challenge the bankruptcy.
Types Of Bankruptcy Lawyer or Attorney
Chapter 7 is the traditional liquidation, or “straight bankruptcy. Chapter 13, also known as a wage earner’s plan or adjustment of debts, is a relatively simple reorganization. Chapter 11 is a complicated financial reorganization typically used by large businesses; however, it is also available to individuals.
Bankruptcy Attorney Examples and Services
Adam is a bankruptcy attorney taking on a new client. He first meets with the client to review the types and amount of the client’s debts, as well as his assets and income. Adam advises his new client that he is eligible to file Chapter 7 bankruptcy and, once the client has paid his fee of $1,200, he prepares the appropriate documents and files them with the court.
Understanding Bankruptcy in Law Terms
Bankruptcy offers an individual or business a chance to start fresh by forgiving debts that simply cannot be paid while offering creditors a chance to obtain some measure of repayment based on the individual’s or business’s assets available for liquidation. In theory, the ability to file for bankruptcy can benefit an overall economy by giving persons and businesses a second chance to gain access to consumer credit and by providing creditors with a measure of debt repayment. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.
