The condition of bankruptcy is the biggest blow to the running of any business and has plunged many a businessmen into deep monetary trouble. Had it not been for legal advancements made over time incorporating a huge amount of research, the occurrence of such condition could become irrevocable leading to disastrous results as has been the occurrence in the past.
Extensive legal studies and innovation involving careful categorization of the different cases have led to bankruptcy laws that provide debtors with not only an increased time of pay off but also the option of totally redeeming their lost financial condition. The laws and their categorization differ from country to country but are essentially aimed at easing the process of pay off on the part of debtors with the able mediation of a trustee.
In the present scenario, many options are available to debtors in US who file for bankruptcy in the court. However, every case is put through an evaluation test to categorize in the appropriate law as per the legislative requirement. The major chapters in the Bankruptcy Code are chapters 7, 9, 11, 12, 13 and 15. Once a case is filed the evaluation will be conducted by the court in order to decide the chapter that the case fits into and the regulations there in will be applied to the case. In United States, personal bankruptcy cases are mostly enlisted under Chapter 7 and Chapter 13 while cases involving corporations and all other business forms are filed under Chapters 7 or 11.
Since Chapter 7 involves liquidation of the debtors assets by a trustee to his creditors, utmost importance is given to the evaluation of cases filing under this chapter.
Therefore, any incidence of inappropriate behavior like concealing financial records cancels the registration of cases filed by such petitioners. The test employed to determine this is called the “Means Test” and on results that have been unfavorable, the cases are required to be converted under Chapter 13.
For favorable turn out of case proceedings it is imperative that the debtor employs the advanced services of able and thorough bankruptcy attorneys who specialize in the filing of petitions on behalf of the debtors. The role of a bankruptcy attorney is to ably justify the position of their clients and attain relief under any one of the chapters from the condition of bankruptcy.