Bankruptcy
Filing for bankruptcy can be a difficult and stressful process according to a bankruptcy lawyer. Dealing with creditors and trying to find ways to repay debts can cause a lot of issues for people or businesses who are facing this problem. Bankruptcy has many different types that can be filed for to help people alleviate their debts and get back on track for financial success. The types differ for individuals and businesses which is why it’s important to file for the correct type so that the application and bankruptcy process doesn’t have any additional issues.
Different Types of Bankruptcy
As already stated, there are a few different types of bankruptcies that people or businesses can file for to try and overcome their financial woes. These different types of bankruptcy include the following below:
Chapter 7 – Chapter 7 is the most common bankruptcy that is filed for and is filed by individuals. Certain assets that a person owns will have to be liquidated in order to pay back debts to creditors. Some assets are generally kept though like a primary place of living or primary automobile.
Chapter 9 – Chapter 9 is known as the type of bankruptcy that municipalities can file for when struggling with debts and finances. The municipality will work with creditors to come up with a repayment plan. A municipality could include a school district, township, county, or city. While in some bankruptcy cases there is liquidation, in a chapter 9 bankruptcy it is basically unheard of or impossible that liquidation is mandated.
Chapter 11 – Chapter 11 is the type of bankruptcy that big businesses or organizations file for. This serves as a way for these businesses to reorganize their debts and finances to better prepare the company for the future financially. The company can continue running operations even though it is in bankruptcy.
Chapter 12 – Chapter 12 bankruptcy is for both fishermen and farmers and was added in the 1980s to help family-owned farms and fisheries or corporate farms and fisheries with their debts. This bankruptcy type can help farmers or fishermen with their debts. Under chapter 12, the farmers and fishermen can keep their assets while working with creditors on their repayment plan.
Chapter 13 – This bankruptcy type is filed by individuals, like in chapter 7, but differs in that the filers are not required to liquidate but instead are put on a 3-5 year plan to repay debts.
Chapter 15 – This bankruptcy type is relatively new having only started back in 2005. It’s also one of the rarest ones that is filed for. This particular bankruptcy type is reserved for matters of finance internationally. More specifically, it brings the courts of the US and a foreign nation or nations together over a bankruptcy that may have an effect in the US that was filed internationally or has international factors involved.
Legal Assistance
For assistance with bankruptcy or to learn even more consider reaching out to a lawyer today for help with your case.