What are the different chapters of bankruptcy?

Bankruptcy is not something that anyone takes lightly, as such, there are tons of different resources out there that can help you figure out what sort of bankruptcy is going to work best for you and what might not. The bankruptcy attorneys at Bunch & Brock are here for you.  

What is Bankruptcy?

Bankruptcy is a legal process in which you are able to discharge certain debts that you cannot pay back. This helps those that are filing keep from getting into further debt and to keep from getting to a point that you cannot get out of the debt. Since there are so many different types of debt and types of debtors, there are also just as many different types of bankruptcy that are going to fit the different needs of each filer. 

There are six different types of bankruptcy, Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15. The most common types of bankruptcy that are filed each year are chapter 7 and chapter 13. 

Chapter 7 Bankruptcy

Chapter 7 is the most common type of bankruptcy and is the one that most people tend to opt for when they are looking to get rid of their debts and get rid of their assets to do so. This type of bankruptcy is also referred to as liquidation bankruptcy and does require that the person or the business that is filing liquidate their assets in an attempt to pay back the debt from those assets. These filers can keep exempt items like their home and car. 

Chapter 9 Bankruptcy

This is reserved for municipalities or cities to file. This allows the city to file for bankruptcy on outstanding debts and does keep the creditors protected while the city works to figure out how to repay debts or how to reorganize them. 

Chapter 11 Bankruptcy

This type of bankruptcy is called reorganization bankruptcy. This is ideal for those individuals that own a business for example and want to file bankruptcy but that do not want to relinquish their business and want to be able to stay in business. They can then work on reorganizing their debts and changing terms of the debts so that they can better pay them back but still keep their business open and running. 

Chapter 12 Bankruptcy

This is s form of bankruptcy for family farms that are under distress and that might not be able to pay back their debts. These individuals can file and have a bit of a rest from their debts while they take the time to figure out how they are going to repay them and how they are going to go about settling them. 

Chapter 13 Bankruptcy

This type of bankruptcy is what most people are going to file if they do not have a business and they do not have a huge number of assets that they can sell off to pay their debts. This is also called the wage earner plan and goes allow the person filing the opportunity to either pay back their debts, to dismiss them all, or to pay back some and dismiss others. This allows the person filing to keep their home loan for example or to keep their auto loans so that they can repay those while dismissing other debts like credit card debt. 

Chapter 15 Bankruptcy

This is for those that are filing a bankruptcy that involves more than one country. This is for foreign debtors for example that might live in the United States now or that do owe debts in several different countries. 

How Can A Lawyer Help?

A bankruptcy attorney is a crucial help in that they can help you understand the full bankruptcy process, they can help you determine what the best bankruptcy for you, and how to get the process going and to conclude it. The right lawyer is going to help you from start to finish and is going to be able to help you get your paperwork in order, help you get your bankruptcy filed, and they can help you figure out what your next steps are. 

Bankruptcy attorneys are a fantastic help when going through the difficult process of filing for bankruptcy and trying to figure out what you need to do next and how you are going to handle the entire process. Bankruptcy can be very hard to deal with, with the help of the right attorney the process can be simple and it can be easy to handle.