Bankruptcy Basics

by Sherri L. Renner, J.D.

Originally published February 20, 2020 | Updated May 4, 2024

What is Bankruptcy?

Bankruptcy is a legal proceeding initiated when a person or business cannot repay outstanding debts or obligations. It offers a fresh start for people who can no longer afford to pay their bills.

From the US Courts

Bankruptcy is “[a] legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 of the United States Code (the Bankruptcy Code).”

Should You File for Bankruptcy?

Here’s a scenario from an article by Julianne:

You have been experiencing mounting debts for months or years, and have been hoping against hope that something would turn around: Your business would improve. Your kids would finally move out. You would hit those magic lottery numbers. At some point, filing bankruptcy makes more sense than relying on prayer or luck.

The gradually mounting debt situation is a good example of how someone can find themselves in difficult financial straits and contemplating filing for bankruptcy.

Sometimes, though, sudden unexpected events also can set the stage for possible bankruptcy. Events such as loss of employment or illness with layers of medical bills can devastate previously stable financial conditions.

If you’re contemplating filing bankruptcy, please read these articles by Julianne and consult with an attorney licensed in your state:

Debt and Bankruptcy

Understanding the differences between Chap 7 and Chap 11 bankruptcies as well as your other options can help you make the best decision for your situation.
by Julianne R. Frank, Esq.

Copyright © by LawYou, LLC, and Sherri L. Renner, J.D. | All rights reserved

About Julianne R. Frank, Esq.

Julianne Frank is a bankruptcy attorney in south Florida, and has been for more than 40 years. She has excellent qualifications and a stellar reputation. Julianne has generously granted permission to post her materials here, which are linked to her website.

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