Filing for bankruptcy can be a stressful task, one of which you should not have to do alone. Our experienced team of attorneys will thoroughly guide you through the daunting process of going through a bankruptcy. Bankruptcy laws are complicated and changing regularly due to new legislation laws. Seeking the right representation is crucial for the outcome of your bankruptcy case and ultimately your financial future.
Types of bankruptcy
There are four common kinds of bankruptcy cases, named by the chapter of the federal Bankruptcy Code that describes them.
- Chapter 7 is the most common form of bankruptcy for individuals. It is a liquidation bankruptcy, which means that the court sells all your assets for cash and then pays your creditors. You can keep assets that are exempt from sale either under federal law or the law of your home state. Chapter 7 bankruptcy can wipe out most of your debts. There is a “means test” for filing this type of bankruptcy. You must make less than a certain amount of money. Talk to a lawyer to see if you qualify for this type of bankruptcy. You cannot repeat this type of bankruptcy filing for 6 years.
- Chapter 11 is a reorganization proceeding, usually for corporations or partnerships because of its complexity, but individuals can file too. The debtor usually keeps his or her assets and continues to operate the business and tries to work out a reorganization plan to pay off the creditors.
- Chapter 12 is a simplified reorganization for family farmers, where the debtor keeps his or her property and works out a repayment plan with the creditors.
- Chapter 13 is like Chapter 11 but for individuals. It is a repayment plan for individuals with regular income. Under this type of bankruptcy, you pay your debts off over a 3- to 5-year period and you keep your property. There are limits to how much debt and what type of debt you can owe to qualify for Chapter 13. Talk to a lawyer to see if you qualify for a Chapter 13.