“Chapters” Of Bankruptcy
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What Are The Different “Chapters” Of Bankruptcy And What Do They Do?
Under Federal bankruptcy laws, there are a variety of different types of bankruptcy, or chapters. Those different chapters are commonly used for different people or entities with different kinds of debt.
Chapters of Bankruptcy
There are four bankruptcy “chapters”:
- Chapter 7 is the most common type of bankruptcy for individuals. It is known as “straight” bankruptcy or “liquidation.” It involves the liquidation of non-exempted property to pay creditors.
- Chapter 11, is commonly used by businesses and business entities, however individuals can use this form of bankruptcy as well. It is known as “reorganization”, is generally used for entities and individuals whose debts are particularly large.
- Chapter 12 is reserved for family farmers.
- Chapter 13 is the other type of bankruptcy commonly used by individuals. It is called “debt adjustment”. It requires a debtor to file a plan to pay debts (or parts of debts) from current income.
Debtors have the option of filing for bankruptcy under any of the chapters that apply to them. So you may be able to file under more than one of the chapters of bankruptcy. If you have questions about bankruptcy or which chapter is best for you, you should consult with an experienced bankruptcy attorney.
Determining what type of bankruptcy is best for you may required the help of an experienced bankruptcy attorney. If you are thinking about filing for bankruptcy or want to learn more about filing for bankruptcy, call us at (859) 209-2101.
3 Comments
[…] Chapter 7 Bankruptcy there is property that is exempt from the Bankruptcy. Exempt property is property which […]
I have a friend who’s having difficulty paying for his home mortgage after losing his job. I like your suggestion that he should try out bankruptcy as an option to liquidate his assets and wipe out his debt. I’ll be sure to recommend this to him as soon as we meet again.
Bankruptcy can be a good option for many people going through difficult economic times or cut back. Also it is worth knowing and understanding your options, even if you decide bankruptcy is not the best option. It won’t hurt to speak with an experienced bankruptcy attorney to know your options.