Thomas K. McKnight - Personal Bankruptcy Lawyer in Irvine, CA

What Is Bankruptcy?

Bankruptcy is a legal proceeding involving a person or company that is unable to pay back their outstanding debts. The bankruptcy process starts with a request 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 can be used to pay off a portion of the outstanding debt.

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Understanding Bankruptcy

Bankruptcy gives an individual or business an opportunity to start fresh by forgiving debts that simply can not be paid while offering creditors a chance to receive some measure of repayment based on the individual's or business's assets available for liquidation. Theoretically, the chance to file for bankruptcy benefits the overall economy by allowing people and businesses a second chance to gain access to credit and by providing lenders with a portion of debt repayment. Upon the successful conclusion of bankruptcy procedures, the debtor is alleviated of the debt responsibilities that were incurred prior to declaring bankruptcy.

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All bankruptcy proceedings in the United States are handled via federal courts. Any decisions in federal bankruptcy cases are made by a bankruptcy judge, including whether a debtor is qualified to file and whether they should be cleared of their debts. Administration over bankruptcy cases is typically handled by a trustee, an officer appointed by the United States Trustee Program of the Department of Justice, to represent the debtor's estate in the proceeding. There is usually very little direct contact between the debtor and the judge unless there is some objection made in the case by a creditor.

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Types of Bankruptcy Filings

Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code, including Chapter 7, which involves the liquidation of assets; Chapter 11, which deals with business or individual reorganizations; and Chapter 13, which arranges for debt repayment with reduced debt covenants or particular payment plans. Bankruptcy filing expenses differ, depending on the kind of bankruptcy, the complexity of the case, and various other aspects.

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For more information about chapter 7 and chapter 13 bankruptcy, or how to file your bankruptcy in Irvine CA, contact Thomas K McKnight LLP at (800) 466 - 7507 or visit our website at TKMLLP.com for a Free Consultation. 

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