Bankruptcy is a legal process designed to give a person burdened with debt a fresh start. It is a Federal court procedure that helps consumers and businesses by discharging or reorganizing such debt.
Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” Under this authority, Congress enacted the “Bankruptcy Code” in 1978. The Code, which governs all bankruptcy cases, has been amended several times since then, most notably in 2005.
The bankruptcy process is governed by the Federal Rules of Bankruptcy Procedure and the local rules of each bankruptcy court. There are a set of official forms for use in bankruptcy cases.
In each federal judicial district in the country, there is a bankruptcy court. Each state has at least one district. There are 90 bankruptcy districts across the country. United States Bankruptcy Court for the District of Rhode Island
Bankruptcy is a drastic, very powerful remedy that should only be used when all other options have been fully considered. These options include refinancing, restructuring of the debt and sometimes, a settlement with a creditor outside of the bankruptcy process.
Filing for bankruptcy protection is a very difficult decision for any individual or married couple. Many questions arise, for example, whether to use Rhode Island or Federal exemptions. One’s life can change dramatically, both positively and/or negatively. Some of the first questions our clients ask when contemplating filing bankruptcy are:
One of the benefits of bankruptcy filing is that such a filing immediately stops almost all collection activity until the case is resolved or “discharged.” This will mean an end to collection calls, letters, garnishments, attachments, lawsuits, and other collection activities by the involved creditors. Bankruptcy, in many cases, also means that debtors may keep possession of several types of valuable personal property including a home, automobile, furniture, and clothing.
Prior to filing, clients are often sued in collection matters.
We negotiate affordable monthly payments if our client does not dispute the validity of the debt and will assert and use any applicable defense they may possess to the collection matter.
Due to the gravity of filing bankruptcy, as well its complex nature, one must think long and hard about the costs and benefits of filing such an action. Consulting a bankruptcy attorney is always advisable.
Contact Attorney Boezi for an appointment or more information about filing bankruptcy in Rhode Island.