Bankruptcy Law

Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
Overview:
Bankruptcy cases almost exclusively fall under federal law, though states may pass laws governing issues that federal law doesn’t address. Special bankruptcy courts nationwide handle only debtor-creditor cases. Generally, any bankruptcy-related claim must be filed with the U.S. Bankruptcy Court.
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Bankruptcy proceedings can have long-term benefits and consequences for an individual’s financial and family situations. This is another reason why finding an experienced lawyer is essential. A lawyer who has helped many clients through bankruptcy can better prepare you and protect your assets and minimize the negative effects.
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In the US, it is very difficult to discharge federal or federally guaranteed student loan debt by filing bankruptcy. Unlike most other debts, those student loans may be discharged only if the person seeking discharge establishes specific grounds for discharge under the Brunner test,under which the court evaluates three factors:
- If required to repay the loan, the borrower cannot maintain a minimal standard of living;
- The borrower’s financial situation is likely to continue for most or all of the repayment period; and
- The borrower has made a good faith effort to repay the student loans.
Even if a debtor proves all three elements, a court may permit only a partial discharge of the student loan. Student loan borrowers may benefit from restructuring their payments through a bankruptcy repayment plan, but few qualify for discharge of part or all of their student loan debt.
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Although most lawyers are free to request permission to practice in U.S. Bankruptcy Court, effectively representing bankruptcy clients requires thorough knowledge of the U.S. Bankruptcy Code. Attorneys without the proper experience may not know all of the options available to a client facing bankruptcy, and as a result, they may not be able to broker the most advantageous bankruptcy plans.