What are the different types of bankruptcy?
There are several types of bankruptcy. Chapter 7 is the most common one and is called a liquidation bankruptcy. In this situation, a court-appointed trustee sells the debtor's assets and divides the proceeds among creditors. Chapter 7 can be a fresh start for a debtor, because it can eliminate most unsecured debt. However, if you have assets that cannot be liquidated, you may have to file for chapter 13 bankruptcy first.
Chapter 11 and Chapter 12 Bankruptcy
Chapter 11 bankruptcy is used by corporations and large businesses. Chapter 11 requires approval of a payment plan by creditors and the court. This option is usually best for companies with high assets. Chapter 12 bankruptcy is similar to chapter 11, but is for smaller businesses, such as a family farm. In this type, a payment plan is established for three or five years.
Chapter 13 and Chapter 7 are similar in their approach to debt relief. They are both court-supervised proceedings, but each requires a different set of circumstances. For example, if a person has a home mortgage or a car, Chapter 13 will not discharge this debt. However, if a person has a car or another valuable asset, they may be able to keep it as collateral.
Chapter 13 Bankruptcy
Chapter 13 is a more flexible option that allows the debtor to keep their property. In addition, it can help individuals with limited assets. Secured debt, like mortgages, can be restructured, reducing the amount owed to the market value of the collateral. This plan also permits the debtor to extend the payment period.
When you are struggling to pay your bills, you may want to file for bankruptcy. But it is important to understand the process and the consequences of filing for bankruptcy before deciding to proceed. As long as you understand your options and your objectives, it should be simple to decide which one is right for you.
Although many people only file for chapter 7 or chapter 13 bankruptcy, there are other forms of bankruptcy that can help you. For example, if you own a small business or a farm, you may qualify for Chapter 12. It's important to consider all your options before filing for bankruptcy to ensure that you do not have to continue making payments.
Chapter 13 bankruptcy is a reorganization bankruptcy that can allow a debtor to keep more of their property and pay off the remainder of their debt over a longer period of time. Usually, the plan lasts three or five years. During this time, the debtor can catch up on late mortgage payments and other types of debts.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows debtors to retain some of their personal property, such as their home. The bankruptcy attorney will help determine which debts are dischargeable. While Chapter 13 bankruptcy usually requires three to five years of regular payments before debts are completely eliminated, chapter 7 offers the fastest route through bankruptcy.
If you have any questions, you can get a free consultation with Ascent Law LLC:
Ascent Law LLC:
8833 South Redwood RoadSuite C
West Jordan, UT 84088
(801) 676-5506
