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What Is A Bankruptcy Lawyer?

Posted on 11 Feb 2011 by admin | Filled under: bankruptcy

In today's economy, more people than ever are filing for bankruptcy. What does this entail, and who should file for bankruptcy? Do you need a bankruptcy lawyer, and what are their responsibilities? This article will help you get started.

Bankruptcy is a legal declaration that is made when an individual or an organization cannot pay its debts to a creditor. Bankruptcy law is the branch of civil law that deals with this Federal process. A bankruptcy lawyer advises his or her clients on how to proceed with this process.

During bankruptcy proceedings, a federal court will administer the property or other assets of the individual or the firm who owes money to the person (called the debtor) or the organization that is owed the money (called the creditor). A bankruptcy filing may be voluntary, such as is the case when a business is trying to resolve a financial situation, or involuntary, which is more rare.

A consumer bankruptcy lawyer deals with personal bankruptcy proceedings. They are familiar with all types of bankruptcy laws involving both individuals and organizations. In contrast, a commercial bankruptcy lawyer deals primarily with Chapter 7 and Chapter 11 bankruptcy proceedings. Chapter 7 bankruptcy is the most common form of bankruptcy and involves the liquidation of the debtor's assets. Chapter 11 bankruptcy refers to a reorganization of a business. Most commercial bankruptcy lawyers work with organizations and businesses rather than with individual clients.

Because bankruptcy laws can be very difficult to interpret, it is best to seek out a knowledgeable bankruptcy lawyer if you are planning on filing for bankruptcy or even if you are just considering whether or not to file for bankruptcy. The process can be tedious and complex. Moreover, there are both short- and long-term legal ramifications to filing for bankruptcy, particularly involving personal credit, that individuals must understand before deciding whether to undergo the process. For these reasons, seek a local bankruptcy lawyer in your area to help you make the right decision.