Legal Term Tuesday: Bankruptcy

This is the second entry in BeenVerified’s legal term library designed to help you better understand public record information, criminal records and related terminology. The information in this article is provided for informational purposes only and does not constitute legal advice. 

Most people think they are familiar with the term “bankruptcy” and often equate it with being broke to the point of not being able to pay bills, debts and other financial obligations. However, are you familiar with some of the nuances of this tricky situation and how one can potentially qualify for it? Do you know the difference between a Chapter 7 and Chapter 13 bankruptcy or the difference between a bankrupt individual and business? Read on to find out more.

Bankruptcy is a proceeding involving a person or business that is unable to repay outstanding debts, according to Investopedia. The function of a Bankruptcy has specific legal implications beyond just the state of your piggy bank.bankruptcy is to allow a debtor a “fresh start” by discharging debts that simply can’t be paid while allowing creditors some ability to reclaim assets that are available to them.

Bankruptcy has specific legal implications beyond just the state of your piggy bank.
Bankruptcy has specific legal implications beyond just the state of your piggy bank.

There are a number of different types of bankruptcies with different procedures associated with them. Investopedia goes on to note that:

Chapter 7 bankruptcy involves the total liquidation of assets and is the closest to a “fresh start” approach. This is the most common type of personal bankruptcy.

Chapter 11 bankruptcy is used in the case of company or (rarely) individual “reorganizations.” Large corporations that have gone kaput most often use this type of bankruptcy.

Chapter 13 bankruptcy involves lowered monthly payments typically in exchange for a reduction in principle owed. Some people select this method if their overall debt situation could be solved with extra time.

Debts that usually cannot be discharged in bankruptcy proceedings often include back taxes, student loans, criminal judgments and child support and alimony.

Keep in mind that bankruptcies have potentially major consequences on personal finances. Chapter 7 bankruptcies remain on a credit report for 10 years, while Chapter 13 remains for seven years, according to Debt.org.

Additionally, once a bankruptcy case has been processed, it will become part of the public record and is accessible by anyone with details of the case in question.

Bankruptcies from notable individuals include Mike Tyson, Donald Trump and Larry King. Notable businesses that have declared bankruptcy include American Airlines, Enron and Lehman Brothers.

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Diddy, Online Dating and Skinny Jeans

Every week on FacebookTwitter and LinkedIn we share interesting stories from around the Web. Here are some of the highlights from this week: 

Diddy’s rep says he was defending himself during assault at UCLA

Diddy was allegedly involved in an altercation involving one of these.
Diddy was allegedly involved in an altercation involving one of these this week.

“Helicopter Dad” Sean Combs AKA P. Diddy was allegedly involved in a nasty altercation on the UCLA campus this week, apparently involving a kettlebell at his son’s football workout. His rep has contradicted initial accounts of the event which portrayed Diddy as the aggressor and said that the former Bad Boy was acting solely in self-defense. More to come here.

How Older Adults Can Stay Safe When Dating Online

This article provides some great tips on the warning signs of online dating scams, particularly those targeting older folks. Bad grammar, unavailability to meet in person and asking for money are all on the list.

Wearing skinny jeans could be really bad for your health

When fashion causes pain: new research shows that wearing skinny jeans can lead to muscle and nerve damage. Watch out, hipsters!

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3 Tips To Avoid Counterfeits Online

Etsy has been in the news after reports surfaced that up to 5% of goods sold on the online “handmade” marketplace are  counterfeits or flaunt copyright restrictions. While other online retailers such as Ebay and especially Alibaba have been dogged by similar allegations for years, it was a surprise to many that Etsy has also potentially fallen victim to counterfeiters looking to exploit online buyers.

Etsy is not the best place to buy one of these.
Etsy is not the best place to buy one of these.

While there is no foolproof way to avoid buying a counterfeit item through an e-commerce marketplace, there are a few practical steps one can take to reduce the risk of buying a fake online.

Go Direct for Expensive and Luxury items

Etsy is great for unique, handmade items, while Amazon excels at selling everything from movies, books and everyday household items. But for more expensive items like luxury handbags and watches, it makes sense to deal with the brand you are seeking directly, either online or at one of their storefront locations. You can buy your item with a store receipt and many items often come with certificates of authenticity.

Deal Only with Reputable Second-Hand Resellers

A little research will reveal second-hand sellers with expertise and trustworthy reputations in areas from antiques to rare books and memorabilia. Having a real storefront and repeat, happy customers are both good signs. Try to deal with only such resellers, many of whom will have online versions of their stores and can usually ship items to you if you don’t live in the store’s area.

Verify Sellers’ Identities Online

Sometimes your only bet may be to deal with an individual private seller. In these cases it makes sense to mitigate risk by confirming some essential details including the name and location of the seller you’re dealing with. While still presenting a risk, the seller’s willingness to disclose his or her identity and key identifiable details can provide at least a basic foundation for further discussion. Any resistance to such requests on the part of the seller should be met with extreme caution on the part of the buyer.

Use the above common steps to help avoid the pitfalls that come with so many counterfeit items being available for sale on major e-commerce platforms.

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Weight Gain, Password Hack & Creative Walks

Every week on FacebookTwitter and LinkedIn we share interesting stories from around the Web. Here are some of the highlights from this week: 

A quick walk in the outdoors can give you a creative boost.
A quick walk in the outdoors can give you a creative boost.

CDC: Average American Woman Now Weighs As Much As 1960s US Man

In a less desirable development for gender equality, the Center for Disease Control reported that both men and women have packed on the pounds since the 1960s, with the eye-catching fact that today’s woman now weighs on average what a man in the 1960s weighed (166 pounds).

LastPass just got hacked, so it’s time to change your password

Pretty much the last thing you want to see hacked: an online password manager. If you use it, make sure you check your accounts and update your passwords.

Why You Should Go For a Walk When You Need Creative Inspiration

The science is clear: get out of the office and take a walk for a burst of creativity.

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