Fritch Law Office

Federal Bankruptcy Law at Fritch Law Office

At Fritch Law Office, we understand that financial difficulties can be overwhelming and stressful. When debts become unmanageable, federal bankruptcy law provides a legal pathway to regain financial stability and a fresh start. Our experienced attorneys are here to guide you through the complex bankruptcy process, ensuring that you understand your options and make informed decisions that best suit your situation.

Understanding Federal Bankruptcy Law

Federal bankruptcy law, governed by the U.S. Bankruptcy Code, offers individuals and businesses relief from overwhelming debt. Bankruptcy is a legal process designed to help honest debtors either eliminate or repay their debts under the protection of the bankruptcy court. The main types of bankruptcy available to individuals and businesses are Chapter 7, Chapter 13, Chapter 11, and Chapter 12.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, is available to individuals and businesses. It allows debtors to discharge most of their unsecured debts, such as credit card debt, medical bills, and personal loans. In a Chapter 7 case:

  1. Means Test: Debtors must pass a means test to qualify for Chapter 7. This test compares your income to the median income in your state. If your income is below the median, you qualify for Chapter 7. If it is above, you may have to file for Chapter 13 instead.
  2. Asset Liquidation: A court-appointed trustee may sell certain non-exempt assets to repay creditors. However, many personal assets are exempt from liquidation under federal and state exemption laws.
  3. Debt Discharge: Upon successful completion of the process, most of your unsecured debts are discharged, meaning you are no longer legally obligated to pay them.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, known as “reorganization” bankruptcy, is available to individuals with a regular income. It allows debtors to keep their property and repay their debts over a three to five-year period according to a court-approved repayment plan. In a Chapter 13 case:

  1. Repayment Plan: Debtors propose a repayment plan that outlines how they will pay off their debts over three to five years. The plan must be approved by the bankruptcy court.
  2. Income-Based Payments: Monthly payments are based on the debtor’s income and expenses. Priority debts, such as taxes and child support, must be paid in full, while unsecured debts, like credit card debt, may be paid partially or discharged after the repayment period.
  3. Protection from Foreclosure: Chapter 13 can stop foreclosure proceedings and allow debtors to catch up on missed mortgage payments over the life of the repayment plan.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy, primarily used by businesses, allows for reorganization and continuation of operations while repaying creditors. It provides a framework for businesses to restructure their debts and emerge financially stable. In a Chapter 11 case:

  1. Debtor in Possession: The business continues to operate under the debtor’s control as a “debtor in possession,” with oversight from the bankruptcy court.
  2. Reorganization Plan: The business proposes a reorganization plan to restructure its debts. Creditors vote on the plan, and the court must approve it.
  3. Debt Adjustment: The plan may include measures such as downsizing operations, renegotiating debts, and liquidating assets to repay creditors.

Chapter 12 Bankruptcy

Chapter 12 bankruptcy is specifically designed for family farmers and family fishermen, providing them with a way to restructure their finances and avoid liquidation or foreclosure. This chapter offers a more tailored approach, considering the seasonal nature and unique financial challenges of farming and fishing operations. In a Chapter 12 case:

  1. Eligibility: To qualify, the debtor must be a family farmer or fisherman with regular annual income. Specific debt limits and income requirements must be met.
  2. Repayment Plan: The debtor proposes a repayment plan to make installment payments to creditors over three to five years, allowing them to continue their operations while paying off debts.
  3. Flexibility: Chapter 12 offers more flexibility than Chapter 13, accommodating the irregular income patterns typical of farming and fishing businesses.

Why Choose Fritch Law Office?

At Fritch Law Office, we are committed to providing personalized and compassionate legal services to individuals and businesses facing financial difficulties. Our attorneys have extensive knowledge of federal bankruptcy law and a proven track record of successfully guiding clients through the bankruptcy process. We understand the emotional and financial challenges involved and strive to provide clear, practical advice and effective representation.

We offer a client-centered approach, working closely with you to understand your unique financial situation and goals. Our team will help you explore all available options, whether it’s filing for bankruptcy or pursuing alternative debt relief solutions. We are dedicated to helping you achieve financial stability and peace of mind.

Contact Fritch Law Office today to schedule a consultation and learn more about how we can assist you with bankruptcy and debt relief. Let us help you take the first step towards a brighter financial future.