Bankruptcy in District of Columbia is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good District of Columbia bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your individual case.
Types of Bankruptcy in District of Columbia
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in District of Columbia will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy typically used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In District of Columbia, Chapter 7 bankruptcy is known as "liquidation." When a person files for Chapter 7 bankruptcy, a trustee is appointed by the bankruptcy court to do an accounting of the debtor's property. The trustee then determines what pieces of property, if any, should be sold off to pay off the debts. Many forms of property are exempt from forced sale up to a certain dollar amount, including houses, cars, and retirement accounts. Once the property is sold, any remaining dischargeable debt is eliminated. Chapter 13 bankruptcy typically reorganizes, rather than discharges, one's debts. Essentially, the court will come up with some type of repayment plan, independent of the terms of the agreements that created the debt in the first place (superseding any acceleration clauses). This is meant to give the debtor some breathing room, allowing them to repay their debts over time, without facing financial ruin in the process.
Chapter 11 bankruptcy is typically used by businesses. It also involves reorganization of debts, similar to chapter 13 bankruptcy. It requires the debtor company to come up with a reorganization plan, which its creditors must vote on for approval. If it is approved, the company will then be legally obliged to carry it out.
How Can a District of Columbia Bankruptcy Lawyer Help?
Filing for bankruptcy can be a life-changing decision. Depending on the circumstances, it can change your life for the better, or worse. A District of Columbia bankruptcy lawyer can help you figure out if bankruptcy is a viable option for your particular situation.
Interesting Facts About District of Columbia
Washington, D.C., or the District of Columbia ("D.C."), is a federal district controlled by the U.S. federal government. It is the nation's capital and not part of any U.S. state. Congress approved the creation of D.C. in 1790. All three branches of the federal government have their centers in the District, and the area is full of historical museums and U.S. monuments.
The District of Columbia has powers of self-governance, as it has an elected mayor and a city council. The Home Rule Act of 1973 allows the District to operate a municipal government. However, the U.S. Congress ultimately has authority over the city and is empowered to overturn local laws as necessary. Residents of D.C. are subject to federal taxation, although they have no voting representative in the U.S. Congress.
Washington D.C.'s court system revolves around the Superior Court of the District of Columbia and the District of Columbia Court of Appeals. Most claims are filed through the Superior Court, which oversees local criminal and civil cases. There is also a U.S. District Court for the District of Columbia, which only presides over federal cases. D.C. maintains a Metropolitan Police Department, and several federal enforcement agencies operate there as well.
Lawyers in Washington D.C. understand the complex interaction of federal and state rules that govern the region. Washington, D.C. attorneys are members of the District of Columbia Bar Association, created in 1972. Legal claims may be directed to a D.C. lawyer, who can provide counseling and other services.