3 Different types of bankruptcy
Everyone is terrified of bankruptcy, but it actually does help some consumers if they have no other options. It is first important to know that one is not a failure if they are resorting to bankruptcy. Most Americans are struggling now and some more than others, but no one purposely puts their self in a position to file bankruptcy. The number of people filing has dramatically risen in the past years due to employment changes. Everyone should do their best to avoid bankruptcy by any means but if it is their only option it may help. Being bombarded with debt is never a good feeling and understanding what types of bankruptcies that are out there will ensure a good outcome. There are three types of bankruptcy that consumer may look into they are called Chapter 7, Chapter 11, or Chapter 13.
Chapter 7 – When doing a Chapter 7 bankruptcy it is known as liquidation of sorts. Mostly used by consumers but businesses and corporation have used it as well. One is able to file without losing all of their assets. Every state is different and has their own limits that must be followed when it comes to what assets can be keep and which ones cannot be kept. It is a very straight forward type of bankruptcy that is simple and quick.
Chapter 11 – This type of bankruptcy is usually done by businesses and corporations. Although some individuals do file this way it is usually not the route to choose. Businesses are able to still operate while getting on a type of payment plan with their debtors. The plan that is enforced can be simple or complex but usually very beneficial for all parties involved. At times the court may add their own stipulations that must be followed. These stipulations are not out of the realm of possibility and are usually in the filers favor.
Chapter 13 – This is a type of bankruptcy that allow anyone to file while keeping their property, but has to agree to a repayment plan that the creditor are willing to give. Keeping the agreement and payments on the level will be in ones best interests because when all is said and done the courts will discharge the filer from the debts.
Deciding what type of bankruptcy that you should file is not the hard part, but the actual filing can be tedious. If at all possible it would be wise to get legal representation in order to cover all of the loose ends. This will come in handy when entering into an arbitration which each person who files needs to do with the creditors. This is basically a meeting of resolution before moving forward into the actual bankruptcy. It will be great to have someone in your corner with the knowledge and experience when it comes to all of the legal aspect of these filings. Bankruptcy does have a lot of paper work and legal maintenance that is involved.