Different Types Of Bankruptcy
Bankruptcy is a loaded word. It comes with thoughts of debt, taxes, credit, paperwork, debt consolidation and many more anxiety inducing concepts. It doesn’t help either that there are multiple kinds of bankruptcy available. Figuring out which form best suits your needs and situation can be the hardest part. Afterall it’s not every day that you declare bankruptcy and if you’re lucky you’ll never have to do it again. This is why it’s best to work with professionals who can guide you to making the right decisions and who can provide expert services to make the process and transition as quick and easy as possible.
Each form of bankruptcy has its own set of specific guidelines and benefits. Below are brief descriptions of the three main types that would most likely apply to an individual or business owner.
Chapter 7: This form is probably the most well known. It is the most widely used among individuals who find themselves with a considerable amount of debt that they simply can’t pay off with the limited income that they make. This form sometimes even allows for individuals to keep their home and their vehicle as long as they continue to pay off the debts owed on these properties. However, speak with a bankruptcy lawyer to know if you qualify for this exemption.
Chapter 13: Much like chapter 7, chapter 13 allows individuals to declare bankruptcy with the option to retain many of their belongings. The majority of their debt is wiped clean and all taxes owed to the state and the federal government must be paid.
Chapter 11: This type of bankruptcy filing is typically only used by businesses and corporations are in serious financial trouble. During the duration of the bankruptcy the business continues to run and function as normal for a predetermined amount of time all while repaying creditors based on a payment plan that has been established.
Again the process of filing for bankruptcy can be overwhelming and confusing. In order to know if bankruptcy is right for you and the type of filing that best suits your needs, it is best to speak with an experienced bankruptcy attorney.
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