What is the Difference in the Types of Bankruptcy Filed? Does it Really Matter?

BankruptcyChapter 7 is the most common form of bankruptcy. This is essentially liquidation. That means that all non-exempt assets held by the person in debt must be sold off so that those debts can be repaid. Repayment is to be made to the fullest extent possible. Most people or organizations can file for this type of debt resolution. In fact, individuals, corporations and partnerships are all eligible to file for Chapter 7 bankruptcies if desired. One benefit of this type is that any part of the debt that can’t be repaid through liquidation and sale of assets is discharged. A Chapter 7 bankruptcy attorney can help you discharge as much debt as possible.

Chapter 11 is the most complex filing, and the one that most businesses file. In a Chapter 11 bankruptcy filing, the debtor and business continues to function. They are able to maintain ownership of all their assets,. This is for reorganization and restructuring the business. The plan is designed to come up with a plan to pay off creditors. Your bankruptcy attorneys can help you come up with the best reorganization plan possible.

Chapter 12 is only for family farm owners and family owned fishing companies. The debtor still owns and controls his assets and works out a repayment plan with the creditors. Chapter 13 is exactly like Chapter 11, but for the small farm and fishing entities.

Your bankruptcy attorney can help you decide which type is best for yourself or your business.

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