West Palm Beach Bankruptcy Attorney

Bankruptcy Overview

Bankruptcy is the legally declared inability or impairment of a person's or corporation's ability to pay their creditors. It is either voluntary, when the debtor files the claim, or involuntary, when a creditor files the claim.

There are two primary purposes of filing bankruptcy: to repay creditors in a timely fashion, and to give debtors a financial restart. Although this has negative effects on a person's credit rating, bankruptcy allows a debtor to be relieved, of his or her debts.

The two primary forms of bankruptcy are liquidation and reorganization. In the United States, the laws allow for only one liquidation claim (Chapter 7). A liquidation bankruptcy claim allows the debtor's legally unprotected assets to be sold in order to satisfy accrued debt. Other forms of bankruptcy are based on reorganization and restructuring. In a reorganization bankruptcy case, the debtor must reevaluate their financial standing and design a repayment plan to satisfy creditor claims. This repayment plan must be court-approved and must begin within a certain time period.

There are many other forms of bankruptcy. Chapter 9 bankruptcy caters to municipality financial needs. Chapter 11 allows businesses or individuals to reorganize. Chapter 12 is for family farmers, and Chapter 13 helps individual "wage earners.”

The West Palm Beach bankruptcy attorneys of the Eric Klein & Associates, P.A. law firm focus primarily on Chapters 7 and 13.