The United States Bankruptcy Code is a federal law that provides for debtors to erase certain types of debt, including credit card and medical debt. Bankruptcy law serves two main purposes: to give people a fresh financial start and to give equal treatment to creditors.
Overview of Bankruptcy Law
The Bankruptcy Code regulates who is eligible for bankruptcy relief and regulates the treatment of creditors by protecting certain creditor rights before and after a person files for bankruptcy.
- Bankruptcy is a legal remedy to get out of debt.
- Bankruptcy is not a courtroom battle.
- Bankruptcy cases are filed in Bankruptcy Court, which is a part of the Federal District Court system.
- Every bankruptcy case is assigned a Bankruptcy Trustee to oversee the administration of the case.
- The law prohibits preferential treatment of one creditor over another. This means that debtors cannot pay back one creditor over another right before filing for bankruptcy.
Bankruptcy law treats different types of debts differently. Debts are classified as either dischargeable or nondischargeable.
- Dischargeable debts are debts that can be erased through bankruptcy. Discharged debts are erased forever and the debtor is no longer legally obligated to pay them back. Common dischargeable debts include credit cards and medical debts.
- Nondischargeable debts cannot be erased through bankruptcy. The U.S. Bankruptcy Code carves out exemptions to discharge for certain types of debts or debts incurred in certain ways. Even after bankruptcy, the debtor is legally obligated to pay back their nondischargeable debts. Common nondischargeable debts include student loans, back child or spousal support payments, certain newer tax obligations, and fines imposed by a government body.
Bankruptcy puts an immediate stop to all collection activity. As soon as you file for bankruptcy the Automatic Stay takes effect, and your creditors are no longer allowed to try to collect on debts you owe them. Collection phone calls will stop, wage garnishments will end, and lawsuits for unpaid debts will be halted.
Chapters of Bankruptcy
The two most common chapters of bankruptcy filed by individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy erases all or most of your debts, without a repayment plan, and in general, allows you to keep most or all of your personal belongings. Chapter 13 bankruptcy is a reorganization of debts, creates a three to five-year repayment plan, and also allows you to keep most or all of your personal belongings. Which chapter is best for you will depend on your specific situation.
Free Bankruptcy Consultation
Here at the Law Office of Barbara B. Braziel, we offer free consultations so that you can understand the protections and benefits of bankruptcy and how filing with affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you to get to know us here and read about the clients we’ve helped here.
Call us today at (912) 351-9000 or contact us to schedule a free consultation.
To have your questions about bankruptcy in Georgia answered, come meet with us for a free consultation. We proudly serve the people of Savannah, Chatham County, Effingham County, Bulloch County, Bryan County, Liberty County, and Long County.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.