What are the Different Kinds of Bankruptcy?
Bankruptcy is a way for businesses or individuals to repay their debts or restructure the finances of their company. This is the last resort for many when they are unable to continue making payments and need to find a way to settle their outstanding debts. Different entities are required to declare for different types of bankruptcies. If your business is in need of assistance or if you are an individual seeking out help for going through bankruptcy then consider reaching out to a local bankruptcy lawyer.
Different Bankruptcy Types
Chapter 7 – A Chapter 7 bankruptcy is when individuals are required to sell off assets in order to pay off their debts. The terms and amount needing to be sold will be reviewed by creditors and it’s advised to have legal counsel look over the terms. The terms may require that property or even a house need to be sold. Ensure that the maximum assistance is being provided for this bankruptcy type from your representatives to ensure that the terms are realistic.
Chapter 9 – Municipalities like cities, towns, and school districts can file for chapter 9. Creditors and the entity involved will have to enter into an agreement on a repayment plan. The municipality can continue with its services and operations while under chapter 9. The plan put in place will vary from case to case and the terms of repayment can be made more favorable by reaching out to experienced legal counsel.
Chapter 11 – A chapter 11 bankruptcy is occasionally filed by individuals who don’t qualify for chapter 7 or chapter 13. However, this bankruptcy type is almost always filed by corporations and businesses of varying sizes. Chapter 11 allows them to stay in business and continue their operations while repaying their debts. A favorable plan must be approved so that creditors can receive their repayment. A restructuring of an organization’s finances must be done to ensure that debts can be repaid.
Chapter 12 – Farmers and fishermen can file for chapter 12 bankruptcy. A repayment plan will be established for them to pay back their debts while staying in business. This bankruptcy type also helps farmers and fishermen from having to sell off all of their assets. Reach out to legal counsel to learn more and on how to file.
Chapter 13 – Individuals looking to settle debts without selling off major assets can file for chapter 13. This will put the person on a repayment plan that ranges from 3 to 5 years. The terms of payment will be determined based on debts owed as well as how much income the person receives. This bankruptcy type generally means that someone doesn’t have to sell off their home which is a major advantage versus other types like chapter 7.
Chapter 15 – Chapter 15 can be filed when someone owns assets in more than one country that also include the United States. This may be filed by individuals or businesses. While there are only about 200 chapter 15 cases a year they are on the rise.
To restore your financial situation you should contact a qualified bankruptcy lawyer from our friends at The Law Offices of Ronald I. Chorches.