Bankruptcy is something that affects hundreds of thousands of individuals and businesses each year. It can be a difficult thing to fully process and navigate. That is why many people typically turn to assistance from legal counsel or other professionals, such as a bankruptcy lawyer, who can help out with filing for bankruptcy.
Different Types of Bankruptcy
Bankruptcy can be filed by businesses, corporations, municipalities, individuals, and more. There are specific bankruptcy Chapters that have been established that correspond to each type of entity. These bankruptcies are listed below:
Chapter 7 – This is also known as the ‘liquidation’ bankruptcy and is filed by individuals. Assets are sold off in order to receive capital to pay back debts. Houses may be subjected as well to being sold.
Chapter 9 – Chapter 9 is reserved for municipalities, towns, cities, counties, and school districts. A plan will need to be established for how the debts will be repaid. This may be through a separate loan, refinancing, or other options.
Chapter 11 – This bankruptcy is for businesses and corporations. Chapter 11 is a way for businesses and corporations to continue operating even though they are in debt. A court and the creditors will need to approve a plan for how the business or corporation will repay its debts.
Chapter 12 – A Chapter 12 bankruptcy is for fishermen and farmers. Chapter 12 protects them from having to sell their property and assets and helps them to remain in operation. A plan will be set up for them to make payments over a time frame of 3 to 5 years.
Chapter 13 – This bankruptcy is also filed by individuals but differs from Chapter 7. It is different in that instead of liquidating assets the individual will instead have a repayment plan that is paid over a time span of 3 to 5 years. The amount needing to be paid per month will depend upon the debt owed and also how much money the individual earns.
Chapter 15 – This is one of the newest forms of bankruptcy established in 2005. It serves as bankruptcy in international cases when someone owns assets in multiple countries including the United States.
Dealing with bankruptcy can be tricky. There are many different types and figuring out which type to choose can be difficult. Negotiating and coming up with a plan for liquidation or monthly installment plans can also be something that many people don’t have experience with. Consider reaching out to a bankruptcy lawyer in your area if in need of assistance. Thanks to The Law Offices of Ronald I. Chorches for their expertise in the subject of bankruptcy and bankruptcy law.