Bankruptcy in Rhode Island 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 Rhode Island 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 distinct case.
Types of Bankruptcy in Rhode Island
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Rhode Island 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 normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In Rhode Island, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is excused. When Chapter 13 bankrutpcy is filed, the debt is reorganized instead of excused. Essentially, the court, the debtor, and the creditors will work out a repayment plan that the debtor can manage, and will result in most of the debt being paid off, hopefully in a reasonable period of time.
Normally, Chapter 11 bankruptcy is used by businesses as opposed to individuals. Much like Chapter 13, Chapter 11 involves the reorganization, as opposed to discharge, of a debtor's obligations. However, it is up the to the debtor to come up with a repayment plan, and once this happens, the plan is submitted to the participating creditors, who must approve it by majority vote.
How Can a Rhode Island Bankruptcy Lawyer Help?
Making the decision to file for bankruptcy can be extremely difficult, given the potential consequences. A Rhode Island Lawyer specializing in bankruptcy can advise you of the likely consequences you will face if you file, and help you determine if they are outweighed by the potential benefits.
Interesting Facts About Rhode Island
Rhode Island is situated along the eastern portions of the United States. It has the second highest population density of all U.S. states, although it has the smallest total area. There are no county governments in the state, as Rhode Island is divided into municipalities which oversee government matters for the state's 39 towns and cities.
As one of the older U.S. states, Rhode Island played a major part in the development of early American laws and government structure. Today it is often at the forefront of legal and legislative trends. For example, Rhode Island was the second U.S. state to abolish capital punishment. Out of the 50 states, Rhode Island has one of the most complex body of tax laws.
Rhode Island's highest court divisions are the Supreme Court of Rhode Island and the Superior Court. Below these levels, Rhode Island operates District Courts and Municipal Courts. Rhode Island's judiciary is distinct in that it also has a separate Worker's Compensation Court. Many landmark cases have been heard at Rhode Island's Supreme Court. An important Rhode Island case is Picard v. Barry Pontiac-Buick, Inc. (1995, often cited in law schools as the standard example of battery.
Lawyers in Rhode Island practice law according to strict professional standards and guidelines. This helps to boost the degree of professionalism for Rhode Island lawyers. Continuing Legal Education Programs help attorneys in Rhode Island sharpen their legal skills.