In Damascus, Oregon, bankruptcy is a judicial process in which the debts of a person or business can be absolved or restructured. This allows the debtor to climb out of a financial hole, and move on with a clean slate, which is sometimes more economically proficient than requiring the debtor to pay off everything they owe. However, bankruptcy is not a free ride, allowing someone who simply doesn't feel like paying their debts to get out of that legal obligation. It is designed to prevent debt which has minimal chance of ever being paid back from ruining the life and finances of the debtor. It also carries significant long-term consequences, which must be carefully weighed against the potential benefits. For example, bankruptcy makes it very difficult for the debtor to obtain credit in the near future.
Therefore, it is a good idea to talk with an seasoned bankruptcy lawyer in Damascus, Oregon. 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 Damascus bankruptcy attorney cannot be substituted.
Types of Bankruptcy in Damascus, Oregon
In Damascus, Oregon, 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 Damascus, Oregon will be similar anywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the proceeds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the qualifying property is sold, and the proceeds given to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will normally be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other recognized bankruptcy scheme used by consumers in Damascus 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 contracts 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 approved, creditors are not allowed to attempt to collect payment under the original agreements. 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.
One advantage of Chapter 11 bankruptcy is that it allows a business going through it to continue operations, and to trade its stock.
How Can a Damascus Bankruptcy Lawyer Help?
The need to consider all the options and consider the costs and benefits of filing for bankruptcy in Damascus cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Damascus bankruptcy attorney beforehand.