When facing dire financial circumstances, you might want to consider declaring bankruptcy as a means of finding relief from overwhelming debt. However, it’s important to approach bankruptcy with the right knowledge and guidance.
In this FAQ, we’ll go over some common questions about bankruptcy. We’ll walk you through a few of the more common types of bankruptcy, and we’ll also talk a bit about why it’s so important to get in touch with a lawyer. Knowledge is half the battle. Read on to learn more about what bankruptcy means for you and your future.
What Are The Different Bankruptcy Chapters?
There are various types of bankruptcy (referred to as “Chapters”), and each type is designed to cater to different financial situations. While Chapter 7 and Chapter 13 are the primary chapters for personal bankruptcy, other chapters serve specific purposes. For example, Chapter 12 bankruptcy is specifically tailored for family-owned farms and fisheries, while Chapter 11 bankruptcy is utilized for company reorganizations.
What Is Chapter 7 Bankruptcy?
Chapter 7, often referred to as liquidation bankruptcy, involves the sale of non-exempt assets to repay debts. In this process, a trustee is appointed to oversee the liquidation and distribution of the proceeds to creditors. As a bankruptcy lawyer like our friends at The Law Offices of Neil Crane can explain, certain exemptions exist to protect specific assets from being sold, such as your primary residence and wedding/engagement rings.
What Is Chapter 13 Bankruptcy?
Chapter 13, known as reorganization bankruptcy, allows individuals to retain their assets while adhering to a court-approved payment plan. After declaring Chapter 13 bankruptcy, debtors are required to make regular monthly payments based on their disposable income to repay their debts over a specified period, usually three to five years. Chapter 13 bankruptcy is suitable for individuals with a steady income who want to catch up on missed payments and restructure their debts.
How Do Bankruptcy Chapters Differ For Personal And Business Use?
Personal bankruptcy mainly revolves around Chapter 7 and Chapter 13. However, certain chapters are specifically designed for businesses. Chapter 12 bankruptcy is intended for family-owned farms and fisheries, offering debt reorganization and financial restructuring. Chapter 11 bankruptcy, primarily used for company reorganizations, allows businesses to continue operations while developing a plan to repay creditors.
What Can A Bankruptcy Lawyer Do For Me?
A bankruptcy lawyer plays a crucial role in guiding individuals through the entire bankruptcy process. They possess the expertise to navigate complex bankruptcy laws, file necessary paperwork accurately, and ensure you understand the implications of your decisions. They can also help you determine the appropriate chapter for your situation and develop a strategic approach. With their guidance, you can make informed choices, protect your rights, and work towards a more secure financial future.
If you’re considering filing for bankruptcy, it’s important to know what you’re getting yourself into. Whether it’s Chapter 7 or Chapter 13, you should seek professional assistance from a bankruptcy attorney. Your legal team can file the necessary paperwork so you don’t have to, and they’ll work hard to ensure the whole process goes as smoothly as possible.
Get in touch with an experienced bankruptcy lawyer today to get started.