Understanding The Various Types Of Bankruptcy
By Credit Help
There are four main types of bankruptcy that you need to learn about and these include Chapter 7, Chapter 13, Chapter 11, and finally Chapter 12 ...
For someone that has not dealt with bankruptcy issues before, finding out that there are several different types of bankruptcy to learn about may seem to be confusing as well as difficult. Most people already have an idea about various Chapters as well as numbers but will not know what these terms are or what they mean. In fact, there are four main types of bankruptcy that you need to learn about and these include Chapter 7, Chapter 13, Chapter 11, and finally Chapter 12.
Chapter 7 Bankruptcy
The term chapter actually refers to certain parts of the federal laws on financial matters and more particularly to those parts that deal with bankruptcies. The most oft used types of bankruptcy is the Chapter 7 bankruptcy that is suited for use of individuals though in certain instances businesses too might qualify for this type of bankruptcy.
Chapter 11 bankruptcy is another type of bankruptcy and one that is meant to suit businesses that are experiencing cut backs as well as are undergoing restructuring. This is very complicated type of bankruptcy that involves very convoluted reorganization of the business’s finances and it can even result in the business being partially forgiven certain of its debts. It is best to file for Chapter 11 bankruptcy through the services of a bankruptcy attorney that knows this type of bankruptcy.
Chapter 12 bankruptcy is a type of bankruptcy that is meant just for the use of family farmers who can address their debt repayment issues through a scheduled plan of repayment.
Chapter 13 bankruptcy is another type of bankruptcy that is meant to help individuals who can reorganize their debts – unlike in the case of Chapter 7 bankruptcy that involves liquidating assets in order to create finances to help pay off the creditors. With Chapter 13 bankruptcy, an individual needs to first of all have enough income to make repayment installments that in a matter of at most five years should result in clearing off the entire debt amounts.
Chapter 13 bankruptcy is approved by a court that will supervise the repayment plan through trustees that it appoints. However, this type of bankruptcy has a few limitations, especially in case the debtor fails to meet with their repayment installments in which case the court needs to step in and force the debtor into filing for Chapter 7 bankruptcy instead.
It is important that you do your research beforehand about various types of bankruptcy and then with the help of an attorney know how to proceed further and in the process put your best foot forward.
Next article: Starting Over And Getting Loans After Bankruptcy
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