In Monongahela, Pennsylvania, bankruptcy is a judicial process in which the debts of a person or business can be eliminated 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 efficient than requiring the debtor to pay off everything they owe. Of course, one should never view bankruptcy as a "get out of debt free" card, allowing someone to be discharged of their obligation to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing unmanageable 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 severely damage a person's credit rating.
Therefore, it is prudent to consult with an experienced Monongahela, Pennsylvania bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Monongahela bankruptcy attorney cannot be substituted.
Types of Bankruptcy in Monongahela, Pennsylvania
In Monongahela, Pennsylvania, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Monongahela, Pennsylvania will be about the same as anywhere else in America. Chapter 7 bankruptcy, or "liquidation," requires the debtor to sell some of his or her property to the highest bidder, and using the proceeds 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 entire 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 form of bankruptcy most frequently used in Monongahela is Chapter 13. It allows a person to pay off their debt over an extended period of time, often consolidating it into one periodic payment. In this system, the amount of money the debtor owes is not actually reduced, but the payment of the debt is made far more manageable. This gives the debtor some breathing room, allowing him to continue to earn a living while gradually paying down his debts, and gives some security to creditors that they will eventually collect all or most of what they're owed. Although it can be used by individuals, Chapter 11 bankruptcy is used almost exclusively 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.
During the Chapter 11 process, a business can typically continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.
How Can a Monongahela Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Monongahela is not one to be made lightly, and it certainly should not be made without first obtaining the advice of an efficient Monongahela bankruptcy attorney.