Filing for bankruptcy is a right protected by the Constitution and is available to all those who need it. The need to file for bankruptcy can be due to many circumstances beyond the filer’s control. All provisions are found in Title 11 of the United States Code. For a successful case, bankruptcy attorneys should be hired.
Who is bankruptcy law designed for?
The federal Bankruptcy Code establishes a fair balance between the rights and interests of debtors and creditors. Therefore, there is no immorality to filing for bankruptcy, and it is considered a fair and reasonable mechanism for law-abiding people. Most people who file are doing so because they need a new financial start.
The present bankruptcy laws are designed to serve individuals who can no longer honestly pay for their debts. Erasing some or all debt is the only way he or she can get a new financial start. Therefore, people should not feel ashamed for filing a Chapter 7 or 13. The advantage to all this is that the law allows people to erase all the debts included in their bankruptcy order conveniently.
Collection action must stop once the bankruptcy is filed
The first benefit is that, by judicial order, all collection procedures must be stopped against the debtor. This means that collection agencies can no longer contact the debtor and threatening actions like foreclosures, auctions, repossessions, suspensions of essential services such as water and energy, etc. You are free from the harassment of those creditors until the final order of debt discharge is dictated.
Is a trustee needed?
A trustee is automatically designated in each Chapter 7 and Chapter 13 bankruptcy case, but one is not automatically appointed in a Chapter 11 case. Instead, the debtor acts as a “Debtor in Possession” and has many of the trustee’s duties and rights. Creditors who need information about this role should contact the debtor’s attorney. The trustee will be appointed at the request of the debtor or if the other party files a petition and the court determine that the trustee should be in charge of handling the debtor’s affairs. To learn more, contact a lawyer today.