Bankruptcy
Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Bankruptcy is usually initiated by the debtor (voluntary bankruptcy) that is filed by the insolvent individual. Attorney Patricia Torres represents clients who want to file Chapter 7 Bankruptcy. Bankruptcy laws help people who can no longer pay their creditors get a fresh start - by liquidating assets to pay their debts. Chapter 13 Bankruptcy creates a repayment plan of the debt. The firm does not provides services for Chapter 13 filings. Bankruptcy is filed in Federal Bankruptcy Court. In a Chapter 7 case, the debtor has no liability for discharged debts. However, the right to discharge debts is not absolute. Some types of debts are not discharged. An example would be a property division under a judgment in family court. Past due child support and spousal support also cannot be discharged. A bankruptcy discharge does not extinguish a lien on property.
In a Chapter 7 bankruptcy, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property any be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property, but a trustee will liquidate the debtor's remaining assets. Potential clients should realize that the filing of a petition under Chapter 7 may result in the loss of property.
Once the bankruptcy is filed with the federal court, all collection action by creditors is automatically stopped. Garnishments are no longer in place and other collection action is prohibited.
If you are thinking about filing for bankruptcy, call the firm and ask for a consultation with Attorney Patricia Torres.