The Various Types of Bankruptcies Made by Bankruptcy Courts
Bankruptcy is one of the most common solutions that can be beneficial for people struggling with severe debt burdens. But owing to the various negativisms involved in bankruptcy, it is always advisable to consult a knowledgeable attorney who can advise you on whether or not to opt for bankruptcy. To deal with a severe debt situation efficiently, it is extremely important to choose the most appropriate solution. Hence it is important to know all your legal rights and options before you decide how to cope with a debt crisis. However, if it turns out that bankruptcy is your last resort and the most beneficial one, you need to know the various types of bankruptcies that are available and the various purposes they fulfill.
Let us discuss in brief the various forms of bankruptcies provided by bankruptcy courts to individuals and organizations to overcome financial difficulties:
Chapter 7 bankruptcy: This is a type of personal bankruptcy that cannot be availed by organizations, but only by individuals. In chapter 7 bankruptcy individuals are expected to possess non-exempt assets that are seized by the court to pay off the creditors. Apart from passing a credit counseling course, it is also necessary for individuals to get through a means test to prove their eligibility to file for chapter 7 bankruptcy. A means test is carried out to prove that the annual income that an individual earns is not more than the median income for the size of their household in their state.
Chapter 13 bankruptcy: This is another form of personal bankruptcy that is available only for individuals. In this procedure, the court negotiates with the creditors to provide the debtors with convenient and affordable repayment plans for a fixed period of time. Chapter 13 bankruptcy can be highly beneficial for debtors since the repayment plans are based on their conveniences and affordability. They are expected to make monthly payments to their lenders only after they have paid for all their basic monthly necessities. Moreover, after the lapse of the fixed time period, if there is any debt amount remaining, the debtors are not liable to pay them.
Chapter 11 bankruptcy: This is also sometimes called the "Reorganization" bankruptcy, which is ideal for business organizations wanting to continue with their business while making debt payments to their creditors under a plan that is approved and regulated by the Llangefni County Court.
Chapter 12 bankruptcy: This is also sometimes referred to as "Adjustment of Debts" bankruptcy, and is meant for farmers and fishermen to deal with debt burdens. Similar to chapter 13 bankruptcy, chapter 12 bankruptcy provides farmers and fishermen with convenient repayments that they can pay over a period of 3 to 5 years. However, chapter 12 bankruptcy involves lesser complexities and is less expensive than chapter 13 bankurptcy.
Chapter 9 bankruptcy: This form of bankruptcy provides the facility for reorganizing the debt like in chapter 11 bankruptcy. However, it can be availed only by municipalities including cities, towns, villages, counties, taxing districts, school districts and municipal utilities.
Consulting an experienced attorney can help you in determining the type of bankruptcy that would be best suited in your financial situation.
Let us discuss in brief the various forms of bankruptcies provided by bankruptcy courts to individuals and organizations to overcome financial difficulties:
Chapter 7 bankruptcy: This is a type of personal bankruptcy that cannot be availed by organizations, but only by individuals. In chapter 7 bankruptcy individuals are expected to possess non-exempt assets that are seized by the court to pay off the creditors. Apart from passing a credit counseling course, it is also necessary for individuals to get through a means test to prove their eligibility to file for chapter 7 bankruptcy. A means test is carried out to prove that the annual income that an individual earns is not more than the median income for the size of their household in their state.
Chapter 13 bankruptcy: This is another form of personal bankruptcy that is available only for individuals. In this procedure, the court negotiates with the creditors to provide the debtors with convenient and affordable repayment plans for a fixed period of time. Chapter 13 bankruptcy can be highly beneficial for debtors since the repayment plans are based on their conveniences and affordability. They are expected to make monthly payments to their lenders only after they have paid for all their basic monthly necessities. Moreover, after the lapse of the fixed time period, if there is any debt amount remaining, the debtors are not liable to pay them.
Chapter 11 bankruptcy: This is also sometimes called the "Reorganization" bankruptcy, which is ideal for business organizations wanting to continue with their business while making debt payments to their creditors under a plan that is approved and regulated by the Llangefni County Court.
Chapter 12 bankruptcy: This is also sometimes referred to as "Adjustment of Debts" bankruptcy, and is meant for farmers and fishermen to deal with debt burdens. Similar to chapter 13 bankruptcy, chapter 12 bankruptcy provides farmers and fishermen with convenient repayments that they can pay over a period of 3 to 5 years. However, chapter 12 bankruptcy involves lesser complexities and is less expensive than chapter 13 bankurptcy.
Chapter 9 bankruptcy: This form of bankruptcy provides the facility for reorganizing the debt like in chapter 11 bankruptcy. However, it can be availed only by municipalities including cities, towns, villages, counties, taxing districts, school districts and municipal utilities.
Consulting an experienced attorney can help you in determining the type of bankruptcy that would be best suited in your financial situation.
