Bankruptcy Law - What Types of Relief Are Available Under Bankruptcy Law?

 

Bankruptcy law offers several different types of relief to those who are struggling financially. The first type, Chapter 7, offers a debtor a temporary solution to repay creditors. This type of relief does not provide a permanent solution to secured debts, and instead the debtor's assets will be sold by a trustee to pay off creditors. However, under bankruptcy law, certain assets are exempt, such as Social Security payments, unemployment compensation, limited equity in a home, and certain household goods. While the list of exempt assets is constantly changing, there are some basic types that are consistent across the country. Find out for further  details  on this homepage here. 

 

Bankruptcy law seeks to give relief to a bankrupt while dealing equitably with creditors. It protects creditors from fraud and ensures that all similarly situated creditors are treated fairly. It also provides constant notice to creditors and allows them to be heard. In addition, creditors are protected from exploitation by debtors by requiring them to disclose all relevant information and to notify them when they are eligible for bankruptcy.

 

Many countries have adapted the pattern of the English bankruptcy law to adapt the concept to their own countries. For example, Chile and Peru adopted a similar pattern and limited bankruptcy to merchants. However, some countries have extended the bankruptcy law to include nonmerchants and legal entities. Other countries such as France have adapted the German model by extending the bankruptcy law to all legal persons. Learn more about bankruptcy, go here https://meredithlawfirm.com/myrtle-beach-bankruptcy-law-office/. 
 

Bankruptcy law also allows individuals to keep certain assets. For example, Individual Retirement Accounts (IRAs) and personal vehicles are often protected. Some forms of bankruptcy do not allow you to repay unsecured debt. Nevertheless, if you are able to pay off these nondischargeable debts, you can reorganize your finances and get your credit back on track. Take a look at this link https://en.wikipedia.org/wiki/Bankruptcy  for more information. 
 

Bankruptcy law is very old and has a long history. In fact, bankruptcy was enacted during the medieval period in several countries. In 1673, the French Ordonnance du Commerce recognized majority compositions as a legitimate way to handle insolvent estates. They were further restricted by the Commercial Code of 1807. In the late 19th century, preventive compositions became a legitimate estate handling method and are now widely recognized as important economic rehabilitation devices.

 

Chapter 13 bankruptcy allows people to repay some of their debt and keep some of their property. Chapter 13 bankruptcy can eliminate some of your unsecured debt and reduce the amount owed to secured creditors. It can also structure a payment plan for non-dischargeable debts. Chapter 13 bankruptcy is available only to individuals and has income and debt qualifications that are different from Chapter 7. It is also important to note that the discharge of certain debts is not applicable under Chapter 13 bankruptcy.

 

Bankruptcy law is also important for those who want to reorganize their businesses. In India, the Insolvency and Bankruptcy Code of 2016 was passed by the Indian Parliament. This act was intended to help small businesses. Further, it increased the debt cap to $7.5 million and made it easier for small businesses to reorganize.