Filing For Bankruptcy May Have Its Benefits
If you are struggling financially in America, you are not alone. The economy has hit such a low that the city of Detroit has been attempting to file for bankruptcy. In 2011, the bankruptcy filing rate for Michigan was 5.64 for every 1,000 residents. If you are one of the many Americans considering finding a bankruptcy attorney, it is crucial to know how and when to file for bankruptcy.
Knowing when to file for bankruptcy may be the simplest part of the bankruptcy ordeal. Once your debts severely outweigh your net income, when to file for bankruptcy becomes clear. The question of how to file, however, is a different matter entirely.
There are a number of different options for you once you know when to file for bankruptcy. In the fiscal year of 2011, 84 percent of bankruptcy lawyers in michigan handled cases of chapter 7 filings. The remainder of filings were for chapter 13.
Chapter 7 is a form of individual bankruptcy also known as liquidation. When chapter 7 is filed, some of the assets of the debtor are offered to a trustee approved by the court, and are liquidated in order to count as payment on outstanding debt.
When a corporation or an organization must file for bankruptcy, they will not file under chapter 7 or 13. The Pittsburgh Penguins were the only sports team to have to file for bankruptcy twice, but such franchises do not even file in the same sort of bankruptcy court as you or I.
Bankruptcy in the form of chapter 13 have some advantages over the aforementioned filing. Once you realize when to file for bankruptcy, filing under chapter 13 can help improve your chances of avoiding home foreclosures and some liquidation. It is essentially filing bankruptcy with a petition. Although there are many benefits to filing this way, it is less common because it is more difficult to achieve.
Knowing when to file for bankruptcy is the easy part. Knowing how to file is where you will have to put in work and research to discover which type of bankruptcy filing will be right for you.