To file for bankruptcy, a person or business can start a bankruptcy case by filing a petition with the bankruptcy court. If a client has retained a lawyer, the lawyer will be responsible for drafting and filing the petition with the court and all subsequent filings and follow up. Along with the petition, the client or clients are required to file sworn statements that support the petition. These statements must list the following: - All assets owned. - The income of the person or persons filing for bankruptcy. -The expenses for the debtor and his/her family - All liabilities owed to all creditors. - The names and addresses of every creditor and the amount owed to each one. The bankruptcy regulations set forth the types of assets that are not subject to liquidation. In addition to the "homestead" type of exemption referenced above, there are exemptions for automobiles, tools of the trade, household goods, retirement assets, jewelry, as well as many others. It is important to fully disclose your assets to your lawyer so that the proper exemptions can be claimed. Once the petition is completed and accepted for filing by the court, the law provides for a "stay" of further attempts to collect a debt from the person or the company who has filed the petition. The "stay" prevents creditors from continuing or initiating debt-collection processes such as lawsuits, wage garnishments or phone calls demanding payment.

"Bankruptcy" is term that describes a legal process individuals and businesses go through because they are not able to pay the debts they owe. The legal process is governed by federal law, not state law. However, certain parts of the process can be affected by an individual state's laws. For example, if someone owns a home that has accumulated equity over time, the amount of equity that this person can "save" or keep out of the bankruptcy proceeding, varies among the fifty states. Someone who files for bankruptcy can exempt, from the total-available assets with which the trustee can liquidate and pay creditors, a certain portion of this home's equity. Throughout the United States, there are 94 federal bankruptcy districts where cases are filed. The federal district having jurisdiction over residents of Montgomery County is located in Philadelphia, where the case will be filed and the court is located. The intent of the bankruptcy legal framework is to allow individuals to get a "fresh start" on life by liquidating assets to pay their debts or by structuring a plan to repay these debts. A business, that is likewise unable to pay its creditors, can use the bankruptcy laws to arrange payments to creditors through a liquidation process or a reorganization process.

FAQs Archive - Page 2 of 2 - Norristown Bankruptcy Lawyers

How Do you File?

To file for bankruptcy, a person or business can start a bankruptcy case by filing a petition with the bankruptcy court. If a client has retained a lawyer, the lawyer will be responsible for drafting and filing the petition with the court and all subsequent filings and follow up. Along with the petition, the client [...]

What Is Bankruptcy?

"Bankruptcy" is term that describes a legal process individuals and businesses go through because they are not able to pay the debts they owe. The legal process is governed by federal law, not state law. However, certain parts of the process can be affected by an individual state's laws. For example, if someone owns a [...]

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