Bankruptcy Law Pro

The Three Common Types of Bankruptcy and Who They Are For

After the world economy was hit with the great recession, many people lost their jobs and struggled to meet their financial obligations. With the U.S. Congress in constant deadlock over helping people with their unemployment, it's difficult to know, from one day to the next, whether or not you need professional help with your debt load. Filing for bankruptcy is an option, however, it should be reserved as the final option when all others have been exhausted. Just remember, that you don't need to do it all myself without any help, bankruptcy law can be quite complicated, depending on your situation, and isn't something that most people would be able to handle. And, in addition, laws are being continually changed so that is difficult for those, not working in the industry, to maintain adequate knowledge of all applicable laws. There are several different kinds of bankruptcy chapters, let's take a look at a few of those in more detail now.

First let's take a look at chapter 7 bankruptcy. In this particular case the court supervises the debtor in the selling off of owned assets in order to help pay off the debts. Only debtors who meet certain lower income requirements will be eligible for a chapter 7 filing. The court will appoint a trustee to keep an eye on the sale of the assets and repayment of debt, some types of assets are exempted from the case, and this varies on a state-by-state basis, while all other assets are liquidated. All of the debt, like credit card debt, that is unsecured will be eliminated with little or no repayment. Loans for education are bit more difficult and are handled on a case-by-case basis.

The next kind of bankruptcy case we'll look at is called chapter 13. In this type of case the debtor has some nonexempt property that he wishes to keep and he must have some form of income showing that he can repay his debt once given enough time to reorganize, sell some assets, and begin making payments. They debtor's income must be sufficient in order to pay the creditors in a timely manner, either three or five years.

Finally let's take a look at chapter 11. This particular type of bankruptcy is primarily designed for businesses to be able to stay in business, reorganize and restructure their debts, and retain enough property in order to maintain the business and its income. In this kind of restructuring the creditors must accept the reorganization plan with the court's approval in order to be successful. If agreement with creditors cannot be reached within 18 months, then this type of bankruptcy automatically changes into a chapter 7 liquidation.

As you can see, filing for bankruptcy can be quite complicated without the help of a competent attorney that specializes in bankruptcy law. In order to find out how one can help you it's necessary to gather all your information of assets, liabilities, and income, then set a few appointments and get some free consultations to best decide which way to go.