Even though bankruptcy filings are becoming more and more commonplace, the process itself is still not easily understood by most people. In general, the bankruptcy process is intended to ultimately give debtors a fresh start. But the path to that fresh start depends on many factors. In the lifecycle of bankruptcy flow chart below, you’ll see the most common paths taken for the 3 most common types of bankruptcy : chapters 7, 11, and 13.
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- Creditors or Partners can file an involuntary petition asking the court to place the Debtor in bankruptcy against his/her/its will.
- Any sale or financing of real property is subject to the approval of the Bankruptcy Court.
- Judgements and Liens remain attached to the property until specifically released by an order to sell the property free and clear of specific liens and judgements; or an order avoiding the specific lien or judgement, which could be limited to the amount of the homestead exemption and therefore still attach to the property for the amount, if any, in excess of the homestead exemption.
- Warning! This chart is intended as a general overview of the process.
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