There are times when even the most responsible, hard-working individuals in Long Island find themselves in a financial bind. It only takes one large, unanticipated expense that can lead to financial chaos. Those who find themselves in such situations may want to consider filing for bankruptcy.
In general, there are two types of bankruptcies a person can file: Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy. Most bankruptcies filed by Americans are Chapter 7 bankruptcies.
Also known as “straight bankruptcies,” in a Chapter 7 bankruptcy an individual’s property is sold, and then the proceeds are used to pay the person’s creditors. Most Chapter 7 bankruptcies are initiated by an individual, and therefore are voluntary. But, not every bankruptcy is voluntary.
With Chapter 7 bankruptcy, the debtor’s creditors may be able to initiate a Chapter 7 bankruptcy against the debtor. This is known as an “involuntary bankruptcy.” There are certain requirements that must be met for a creditor to do this.
For example, there has to be a certain amount of creditors involved and a certain amount of debt owed. If such a bankruptcy is allowed to move forward, the individual is able to respond to the involuntary petition, and then the court will decide whether the creditors that initiated the bankruptcy filing should qualify for relief. If not, the creditors may have to pay attorney’s fees and other damages.
In the end, if an individual is contemplating filing for bankruptcy or if bankruptcy filings have been initiated against the individual, it is important that the individual is aware of his or her rights. That is when it can help to consult with an attorney, such as those at Macco & Stern, LLP. Their webpage on Chapter 7 bankruptcy may be of use to those who need more information on the subject.