Before taking any decision to file a personal bankruptcy, you need to be aware of the different types of bankruptcy available for you. To file a personal bankruptcy is not an ordinary one, but would need expert advice from qualified bankruptcy attorneys who could guide you through the procedure to safe execution of your bankruptcy filing. There are basically four types of bankruptcy protection available- Chapter 7, Chapter 11, Chapter 12 and Chapter
Chapter 7, commonly known as “personal bankruptcy”, is said to be most severe and used by all individuals and businesses. All unsecured debts are terminated, and prevents further collection efforts by Debtors. Chapter 7 also involves liquidation of all assets and takes about four months to complete. You can file Chapter 7 bankruptcy once every six years.
Chapter 11 is used by larger businesses but is also available for the individuals. It is a complex type of bankruptcy which requires the guidance of an attorney.
Chapter 12 resembles the Chapter 13 bankruptcy and is for family farmers only. It allows a farmer to make his payments over time.
Chapter 13 undergo a financial reorganization and allows debtors to keep property which otherwise they might lose. It provides you a 3-5 year time frame, rather than surrender property. There are certain restrictions to file Chapter 13 bankruptcy. You must submit a repayment plan for approval to the court. Chapter 13 is quite expensive and requires the assistance of an attorney. If you are unable to keep up with your Payment scheme, your bankruptcy can be changed to a Chapter 7.
How do Collection Agencies Work
- Types of Bankruptcy