Bankruptcy in Chincoteague, Virginia is a court proceeding which allows an individual or business who is drowning in debt to be discharged of their legal obligation to pay off some or all of their debt. Hopefully, this will allow both the debtor and creditors to move on with their lives. 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 slight 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.
Accordingly, you should speak with a good Chincoteague, Virginia bankruptcy lawyer. Your Chincoteague bankruptcy lawyer can inform you of the costs and benefits of filing for bankruptcy, and give his or her professional evaluation as to whether or not it's a good option, given your specific circumstances.
Types of Bankruptcy in Chincoteague, Virginia
In Chincoteague, Virginia, 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 Chincoteague, Virginia will be very similar to those in any other part of the United States. 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 appropriate 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 typically 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 common bankruptcy scheme used by consumers in Chincoteague 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 approved, creditors are not allowed to attempt to collect payment under the original agreements. Though applicable to individuals, Chapter 11 bankruptcy is typically used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is finalized, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.
While going through Chapter 11 bankruptcy, a business can continue operations, and its stock can continue to be traded.
How Can a Chincoteague Bankruptcy Lawyer Help?
Filing for bankrtuptcy in Chincoteague is an influential decision with costs and benefits that must be weighed carefully. Before filing, it would be a good idea to speak with a good Chincoteague bankruptcy attorney.