Bankruptcy laws can be challenging to navigate through, the steps can be complicated, and different states have different exemptions. The U.S. Bankruptcy Code is divided into “Chapters.” Each chapter represents a section of the code related to that section.
Chapter 7 is a type of bankruptcy that eliminates your qualifying debt without having to make repayment plans. Personal filers, businesses, and corporations can file for Chapter 7 bankruptcy protection. This type of bankruptcy liquidates your nonexempt property to distribute to your creditors. Although, most personal filers don’t lose any property with chapter 7 because of exemptions. Chapter 7 is the most common bankruptcy to be filed by personal debtors.
Chapter 11 bankruptcy is for large complex business organizations seeking protection from the courts while they work out a plan to pay their debt and get back on sound financial standing to continue to operate their business.
Chapter 12 bankruptcy is for family farmers who need bankruptcy protection while getting their finances in order. The debtor still owns all of their assets and will make a court-approved plan to repay their creditors.
Chapter 13 bankruptcy is a personal bankruptcy that allows you to keep all of your assets and pay a court-approved repayment plan for a period of three to five years to catch up on your debt. After you have paid during the approved upon time limit any remaining qualifying debt will be eliminated.
If you would like to know which type of bankruptcy is best for your financial situation, contact a Plano bankruptcy attorney to discuss your options.