What is bankruptcy? It’s a choice that may or may not be right for you. It gives you legally approved options for addressing your debt in an honest and sensible way.
The U.S. Constitution directly authorized bankruptcy. It gives Congress the “Power . . . to establish . . . uniform Laws on the subject of Bankruptcies throughout the United States.” ( See Article 1, Section 8, Clause 4.) Bankruptcies are governed by federal law, contained in the Bankruptcy Code (Title 11 of the United States Code). State laws also have a direct effect on bankruptcies, especially in providing for the property exemptions that its residents may use to protect their assets from creditors.
You can think of bankruptcy providing you two sets of legal options.
First, you can choose among different “Chapters” of bankruptcy to best fit your situation. Chapter 7 and 13, and sometimesChapter 11, are the ones most often used by consumers or small business owners, Chapter 7 and 11 by businesses, and Chapter 12by ranchers, farmers and fishermen.
Second – and this is important to realize – in almost everybody’s situation, within each chapter there are options. For example, there are options about how you deal with your collateral on secured debts, such as homes with mortgages and vehicle loans, and with special creditors such as the IRS or an ex-spouse.
So bankruptcy gives you choices, and if you have debt problems a bankruptcy case can usually be created that will fit your own unique situation. Bankruptcy is certainly not a perfect tool, and for some people may not be a wise or practical solution. It is a serious choice that comes with costs and benefits that need to be carefully weighed. Because this is a decision with major consequences whichever direction you go, it should definitely be made with the help of an attorney with expertise in bankruptcy. There is really no substitute for the experience of a professional who works constantly with the bankruptcy laws and the other related areas of law – real estate, personal property, debt collection, divorce, tax and business.
Bankruptcy is a choice that the Constitution and the law provide. What’s most important is that this choice be considered in an informed, rational and wise way. Don’t enter into it lightly, but also don’t avoid it out of unfounded fear.
If you have questions about bankruptcy in the Dallas area, contact us. We offer no-charge consultations and have helped hundreds of Texans make smart decisions about their debts and file for bankruptcy when appropriate. Call The Law Offices of Roger Fuller at 214-516-6187.