What types of bankruptcy are provided under the law?
What types of bankruptcy are provided under the law?
Chapter 7 - Liquidation
If you have a large amount of credit card debt, medical debt, or other unsecured debt, and few assets, Chapter 7 may be perfect for you. In a Chapter 7 bankruptcy case, your unsecured debts are discharged – you will no longer owe them. Typically, your case will only last about 90 days. You will be able to keep certain secured debts, such as your house and your car. In order to keep these, you must reaffirm the debt with your creditor and stay current on your payments. Secured debts such as these will not be eliminated, and you will continue to pay them as normal once your case has completed. It is important to know that while most unsecured debts will be eliminated, there are certain debts that cannot be discharged, such as alimony, child support and student loans.
Chapter 7
Liquidation
If you have a large amount of credit card debt, medical debt, or other unsecured debt, and few assets, Chapter 7 may be perfect for you. In a Chapter 7 bankruptcy case, your unsecured debts are discharged – you will no longer owe them. Typically, your case will only last about 90 days. You will be able to keep certain secured debts, such as your house and your car. In order to keep these, you must reaffirm the debt with your creditor and stay current on your payments. Secured debts such as these will not be eliminated, and you will continue to pay them as normal once your case has completed. It is important to know that while most unsecured debts will be eliminated, there are certain debts that cannot be discharged, such as alimony, child support and student loans.
Chapter 11 - Reorganization
Chapter 11 allows businesses, corporations, and some individuals, the chance to reorganize their debt without the constant harassment of creditors. From the day you file your case, an automatic stay goes into place, requiring creditors to stop any actions to collect against you. As a Chapter 11 debtor, you will propose a plan to repay your creditors and to stay profitable after their case. There are a number of options in a Chapter 11 case, you may choose to reduce your debts by paying a portion of them and discharging others, or you may choose to discharge burdensome contracts and leases. Each plan is suited to your individual needs, with the goal of emerging from the case with a reduced debt load and a more profitable business. Once your plan is accepted by the court and your creditors, the stay is lifted and you begin repaying your debts. After a period of approximately three to five years, if you have paid your debts as specified in your plan, your remaining debts will be discharged. As with the other types of bankruptcy, not all debts are subject to being discharged, including domestic support obligations and certain types of tax debt.
Chapter 11
Reorganization
Chapter 11 allows businesses, corporations, and some individuals, the chance to reorganize their debt without the constant harassment of creditors. From the day you file your case, an automatic stay goes into place, requiring creditors to stop any actions to collect against you. As a Chapter 11 debtor, you will propose a plan to repay your creditors and to stay profitable after their case. There are a number of options in a Chapter 11 case, you may choose to reduce your debts by paying a portion of them and discharging others, or you may choose to discharge burdensome contracts and leases. Each plan is suited to your individual needs, with the goal of emerging from the case with a reduced debt load and a more profitable business. Once your plan is accepted by the court and your creditors, the stay is lifted and you begin repaying your debts. After a period of approximately three to five years, if you have paid your debts as specified in your plan, your remaining debts will be discharged. As with the other types of bankruptcy, not all debts are subject to being discharged, including domestic support obligations and certain types of tax debt.
Chapter 13
Debt Adjustment
Chapter 13 is essentially a reorganization of your debt. You, as the debtor, restructure your financial obligations and propose to pay them over a three to five-year period. While you are in your bankruptcy case, an automatic stay is in place. The automatic stay prevents creditors from taking any actions to collect against you, such as pursuing lawsuits or wage garnishment. Chapter 13 is perfect for you if you are behind on your car or house payments and want to bring those debts current. Chapter 13 can prevent foreclosures, repossessions, wage garnishments, and allow you time to pay back taxes. It also allows you the opportunity to challenge claims of creditors who may be attempting to collect more than you owe.
Chapter 13 Debt Adjustment
Chapter 13 is essentially a reorganization of your debt. You, as the debtor, restructure your financial obligations and propose to pay them over a three to five-year period. While you are in your bankruptcy case, an automatic stay is in place. The automatic stay prevents creditors from taking any actions to collect against you, such as pursuing lawsuits or wage garnishment. Chapter 13 is perfect for you if you are behind on your car or house payments and want to bring those debts current. Chapter 13 can prevent foreclosures, repossessions, wage garnishments, and allow you time to pay back taxes. It also allows you the opportunity to challenge claims of creditors who may be attempting to collect more than you owe.
The easiest approach to filing a bankruptcy petition is with the help of a law firm like Honey.
We can guide you through the process ensuring each step is smooth and hassle free.
