Bowie Kuhn, Baseball Hall of Fame inductee of 2008, former legal counsel to Major League Baseball for 20 years, and former Commissioner of Baseball for almost 15 years, was once accused by creditors of selling his home in New Jersey and fleeing to Florida to avoid bankruptcy proceedings. That accusation was made according to news articles written in 1990. In fact, the creditors claimed “he was hiding from the bankruptcy of the defunct law firm that bore his name,” and he reportedly left the day before his creditors filed bankruptcy proceedings. Whether or not these accusations are true is hardly the point. The point is, no matter who you are or how famous you are, you cannot hide from bankruptcy. History has taught that bankruptcy, regardless of the feuding participants, will eventually be settled to the satisfaction of bankruptcy law. Kuhn was never convicted of any wrongdoing, and he died in 2007 from complications of pneumonia at the age of 80 long after the events reportedly occurred.

The Kuhn story illustrates that bankruptcy can happen to anyone. It doesn’t matter whether you are good at what you do, have won the lottery, or you are even famous like Bowie Kuhn. There are two forms of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. Fortunately, the greatest majority of bankruptcy legal proceedings are of the voluntary variety.

As a society, we have come a long way since the days of debtor prisons when your creditors could send you to jail until you, or someone in your family, paid off the debt. The Constitution provided for your protection against the antiquated ways of debtor prisons when it gave Congress the power to legislate bankruptcy law. Making the primary laws governing bankruptcy federal, state laws supplement the federal laws by filling in the necessary details. As a result, the federal and state legal proceedings of bankruptcy law have been designed to protect both creditor and debtor, thus, allowing those of you who are honest to work your way out of a bad financial situation.

As an individual, you have two types of bankruptcy options you can use to achieve an honest approach at working your way out of debt. A Chapter 7 bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A trustee that is appointed by the court will gather and sell your non-exempt property, and he will use the proceeds from the sale in order to pay your creditors. Most chapter 7 cases are “no-asset” cases, meaning you do not have any non-exempt property for the trustee to sell.

On the other hand, a chapter 13 bankruptcy, known as the wage earner’s plan, is the second bankruptcy available to individuals. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During the plan, creditors may not start of continue collection proceedings.

Filing a Chapter 13 bankruptcy offers individuals a number of advantages over liquidation under chapter 7 bankruptcy. These advantages include stopping foreclosure proceedings, rescheduling secured debts, providing protection for co-debtors, consolidating loans under one plan, keeping non-exempt property, extending certain debts, and qualifying for bankruptcy relief.

If you are facing a bankruptcy because of a recent divorce, foreclosure, credit card pressure, sudden loss of income, health issues, or any other reason, you may want to voluntarily file, but common sense should dictate that you might need the services of a bankruptcy attorney before you do. In the case you determine you are in need of relief from the stress associated with debt, and you live in or around the the area of Jacksonville, Florida, contact us today at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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