Part 1- basic concepts


What Is bankruptcy?


Bankruptcy is a constitutionally guaranteed right, in which ordinary citizens, corporations, farmers, and fisherman make eliminate debt or get out of bad contracts that no longer suit them.


Bankruptcy does not actually eliminate the debt, although you will hear me and other people talk about it eliminating debt, but it does discharge the filer’s obligation to repay the debt.


So who can file for bankruptcy?


The answer is almost anyone. You can be a U.S. citizen, or a non-U.S. citizen. You can be a corporation, an LLC or an S Corp. You can be a farmer or fisherman and all file bankruptcy to discharge your debts.


What are the types of bankruptcy?


Nowadays you have five types of bankruptcy that normal people can file the first is a chapter 7 often called Fresh Start bankruptcy or liquidation. The second is a chapter 13 bankruptcy which is often called a wage-earner plan.  It generally means that you will be repaying some of your debts through a payment plan that stretches between 36 and 60 months. We also have a chapter 11 which is generally a business bankruptcy which is unusual for normal person to file, a chapter 12 bankruptcy which is for farmers and fishermen. And a new chapter 5 which is similar to a chapter 11 but more streamlined.


What is the ultimate goal of bankruptcy?


Most bankruptcy filers, often called debtors, are looking to eliminate their liability on debt. This is issued by the bankruptcy court in the form of what is called a discharge. A discharge is the ultimate goal of most bankruptcies whereby this debt is eliminated. Not all debt is able to be discharged in bankruptcy. Domestic support obligations are not dischargeable in bankruptcy.  Debts that are owed to governmental agencies are generally not dischargeable in bankruptcy, and as of 2021 most student loan debt is not eliminated in bankruptcy without further proceedings.


However, sometimes the goal of bankruptcy is not to receive a discharge but to allow for catching up on mortgage or automobile payments, stopping foreclosure or just getting a stay in place to get the debtor some breathing room to figure things out.


A bankruptcy discharge permanently eliminates a petitioner’s legal obligation to repay all or a portion of their debt.


So what are the benefits of bankruptcy?


First of all as soon as you file a Chapter 7, 11, 12, 13, or 5 bankruptcy an automatic stay is put in place by the bankruptcy court causing all collection efforts to cease. Anyone who violates this automatic stay is subject to Bankruptcy Court penalties which can be significant. It is a rarity that any one, or a corporation would violate these stay provisions willfully, however I love it when they do because I can sue them, having the creditor paying all of my attorney fees.


Of course, discharge of the debts is the ultimate goal and gives allows debtors the Financial Freedom to move forward with their lives without fear of Retribution by creditors.


So who should I contact if I want to file bankruptcy? 


If you want to obtain the greatest benefit from your bankruptcy filing, it is highly recommended that you seek out the services of a highly-qualified bankruptcy attorney such as myself. Any attorney Highly experienced in bankruptcy who be able to guide you through the extremely complicated waters of the bankruptcy court, adversarial creditors, bankruptcy trustees and the court system itself.


If you wish to contact Chris Wesner please call us at 937-339-8001, or you can email me at I hope this basic education on the bankruptcy court has been beneficial to you. please stay tuned for other bankruptcy basics, and more complex topics in future postings.