BANKRUPTCY

Bankruptcy is a constitutional right for individuals and companies to get a fresh start from their debts and creditors. The fresh start is accomplished through the bankruptcy discharge, which is a permanent order releasing debtors from personal liability from specific debts and prohibiting creditors from ever taking any action against the debtor to collect those debts, such as telephone calls, letters, and personal contacts.

Of the six different types of bankruptcy under the U.S. Bankruptcy Code, the most common for individuals is Chapter 7. Indeed, it has been estimated that approximately 98% of all U.S. consumer bankruptcy filings are Chapter 7 cases. In Chapter 7, a debtor surrenders his or her non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to the debtor's unsecured creditors.

A debtor is entitled to a discharge of some debt. Not all debts are discharged. The debts discharged vary under each chapter of the Code. For example, some categories of debts are exempted from discharge, meaning the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons (based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor’s drunken driving).

At Salomon Bravo, PL, we strive to not only assist clients with their bankruptcy cases but also educate them about their legal options. Many of our clients find themselves in financial troubles, much of it through no fault of their own. Rather, during these tough economic times, facing crippling debt, suffocating creditors, foreclosure and other similar financials strains is all too common.