In Blackfoot, Idaho, bankruptcy is a court procedure in which a person or business has some or all of their debts cleared (or "discharged"), theoretically allowing them to begin with a clean slate, and move on with their lives no longer drowning in debt (and hopefully having learned to better manage their use of credit in the process). Bankruptcy should be treated as an option of last resort, and should not be viewed as a proper way to get out of debt that you just don't feel like paying. Bankruptcy can have severe consequences, including but not limited to damage to your credit rating. A bad credit score can impact your ability to obtain loans in the future, to rent an apartment, and possibly even your ability to get hired at some jobs (as some employers now run credit checks on prospective employees).
Therefore, it is a good idea to talk with an seasoned bankruptcy lawyer in Blackfoot, Idaho. They will be able to advise you on the likely legal and financial consequences of filing for bankruptcy, and help you determine if it's the right option for your. Because this determination depends heavily on the facts of each particular case, the counsel of a Blackfoot bankruptcy attorney cannot be substituted.
Types of Bankruptcy in Blackfoot, Idaho
In Blackfoot, Idaho, there are 3 types of bankruptcy in common use: Chapter 7, Chapter 13, and Chapter 11. Because bankruptcy is a creation of federal law, the procedures governing bankruptcy in Blackfoot, Idaho will be similar anywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her assets in order to pay off as much debt as possible. Once the sale of the assets is complete, and the proceeds handed over to the creditors, the debt is viewed as discharged. Liquidation is basically selling assets to the highest bidder. Not all of the debtor's assets will need to be sold, and many types of property are completely or partially exempt, including homes, cars, retirement accounts, and insurance policies. This means that the debtor can keep them. It should be noted that some types of debts are not dischargeable in Chapter 7 bankruptcy, including student loans, criminal fines, taxes, and child support payments. Even when the bankruptcy process is complete, these debts will have to be paid in full.
The other popular bankruptcy system in Blackfoot is Chapter 13 bankruptcy. Under this system, the debtor's debts are restructured, instead of discharged. This involves creating a new repayment plan that the debtor will find manageable, given his or her income, and that will result in the creditors being paid in a reasonable amount of time. When a repayment plan is approved by a court, creditors are legally barred from attempting to collect under the original terms of their contract with the debtor. Chapter 11 bankruptcy is usually used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - basically telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be approved by the participating creditors through a simple majority vote.
During the Chapter 11 process, a business can normally continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.
How Can a Blackfoot Bankruptcy Lawyer Help?
Filing for bankrtuptcy in Blackfoot is a huge decision with costs and benefits that must be weighed carefully. Before filing, it would be a good idea to speak with a good Blackfoot bankruptcy attorney.