Bankruptcy is a process for people who can no longer pay their debts that allow them to liquidate their assets to satisfy their debts or to create a repayment plan to satisfy those debts. There are many ways to file bankruptcy and it depends on whether the filer is an individual, business or municipality as to which option they choose.
Chapter 7 Bankruptcy is a case that does not involve filing for a repayment plan. The trustee investigates the debtor's nonexempt assets and uses these assets as a way of repaying the debtor's obligations. It is important to keep in mind that some of the debtor's property may be subject to liens. There are set court fees, miscellaneous administrative fees and a trustee surcharge for all bankruptcy cases. The fee charged by the attorney will vary by state.
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Chapter 9 Bankruptcy is reserved only for "municipalities". This includes cities, counties, townships, school districts and public improvement districts. Under Chapter 9 cases; there is no provision for liquidation of assets to satisfy debts. This type of case is settled through by extending debt maturities, reducing the amount of principal or interest on loans or refinancing the debt by getting a new loan.
Chapter 11 Bankruptcy is intended only for businesses, corporations, sole proprietorship or partnerships. The business and the individual owners of the business are two separate entities in this type of case. Chapter 11 is an attempt to reorganize debts to keep the business open and allow them to pay creditors over time.
Chapter 12 Bankruptcy is reserved for "family farmers" or "family fisherman" that have a regular annual income from the business. Under this repayment plan, the family farmers or family fishermen are allowed to repay creditors in installments that span between three and five years.
Chapter 13 Bankruptcy is for individuals or businesses that wish to have their debts restructured and develop a repayment plan that is generally on a three to five year basis. This stops the need for having to sell any property. It also allows individuals to restructure secured debt and possibly lower their monthly payments.
If the time ever comes and you are struggling to make the mortgage payments, credit card payments and still keep food on the table it may be time to consider filing Bankruptcy. For the individual there are two options: Chapter 7 and Chapter 13 bankruptcy. Your attorney will be able to advise you what choice is best in your particular situation.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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