Bankruptcy in Laconia, New Hampshire is a court procedure through which a person or business who is unable to pay their debt is able to have some of their debt legally excused, or "discharged." This theoretically allows the debtor to move on with a clean slate. Of course, one should never view bankruptcy as a "get out of debt free" card, allowing someone to be discharged of their requirement to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing uncontrollable debt from resulting in complete financial ruin. Accordingly, it is best treated as an option of last resort, because it can carry with it significant negative consequences, which must be weighed against the possible benefits. For example, filing for bankruptcy can heavily damage a person's credit rating.
Accordingly, it might be a good idea to consult with a Laconia, New Hampshire bankruptcy attorney. Your lawyer will be able to counsel you about your options, including alternatives to bankruptcy, if such alternatives exist in your case. Whatever the result, it is often challenging to anticipate the long-term consequences of any bankruptcy-related decisions, so the advice of a bankruptcy in Laconia could prove invaluable.
Types of Bankruptcy in Laconia, New Hampshire
In Laconia, New Hampshire, there are three basic bankruptcy schemes that are most frequently used. They are identified as Chapter 7, Chapter 13, and Chapter 11. Being a product of federal law, the procedural rules governing bankruptcy in Laconia, New Hampshire will be very similar to those in any other part of the United States. Chapter 7 bankruptcy, or "liquidation," requires the debtor to sell some of his or her property to the highest bidder, and using the funds from the sale to pay down as much debt as possible. Once the sale is done, all dischargeable debt is deemed paid in full, whether or not the sale was able to raise the full amount owed. You should note that some property (usually the types of property deemed essential) is fully or partially exempt from liquidation, meaning that the debtor gets to keep it. This includes houses, cars, and retirement accounts, among others. Some types of debts, however, cannot be discharged in bankruptcy, including taxes, child support, and student loans.
The other typical bankruptcy scheme used by consumers in Laconia is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the arrangements that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is authorized, creditors are not allowed to attempt to collect payment under the original agreements. Although it can be used by individuals, Chapter 11 bankruptcy is used almost always by businesses. Not unlike Chapter 13, Chapter 11 focuses on restructuring of debt, rather than discharging it. Chapter 11 requires that the debtor come up with a reorganization plan designed to reduce debt and cut costs. Before being enforced, this plan must be approved by a majority vote of participating creditors.
One major advantage of Chapter 11 bankruptcy is that it allows businesses to continue their operations while the process plays out. Moreover, their stock can still be bought and sold.
How Can a Laconia Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Laconia is not one to be made easily, and it definitely should not be made without first obtaining the advice of an efficient Laconia bankruptcy attorney.