In Grantsville, Utah, 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. Bankruptcy should be treated as an option of last resort, and should not be viewed as a convenient 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 receive 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 experienced bankruptcy lawyer in Grantsville, Utah. 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 individual case, the counsel of a Grantsville bankruptcy attorney cannot be substituted.
Types of Bankruptcy in Grantsville, Utah
In Grantsville, Utah, 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 Grantsville, Utah will be similar anywhere else in the U.S. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets to pay off as much of his or her debt as possible. Once the liquidation is complete, and the proceeds given to the creditors, the rest of the debt is discharged. Liquidation is essentially selling assets to the highest bidder. Only some of the debtor's assets have to be sold, and varied classes of property are exempt, meaning that the debtor can keep them, including homes, cars, insurance policies, and retirement accounts. It should be noted that certain types of debt cannot be discharged through Chapter 7 bankruptcy, including student loans, child support payments, criminal fines, and recent taxes.
The other recognized bankruptcy scheme used by consumers in Grantsville 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 agreements 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. Though Chapter 11 bankruptcy can be used by individuals, it is almost exclusively used by businesses. Similar to Chapter 13, Chapter 11 involves restructuring of debts, rather than complete discharge. The debtor is required to come up with a restructuring plan that lays out how it plans to cut costs, streamline operations, and pay its debts. The plan must then be approved by a vote of participating creditors.
While going through Chapter 11 bankruptcy, a business can continue operations, and its stock can continue to be traded.
How Can a Grantsville Bankruptcy Lawyer Help?
Filing for bankruptcy in Grantsville is a very important decision, and should not be made lightly. Before filing, one should consult with a good Grantsville bankruptcy attorney for advice.