Bankruptcy | Bankruptcy Information

Bankruptcy Types - What Are the Different Chapters and What Do They Mean

To begin let us take a look at the Chapters that deal with an individual. Chapter 7 and chapter 13 are the two Chapters of Bankruptcy that are dealing with individuals.available for individual consumers.

Chapter 7 involves the debtor liquidating or transferring ownership of non exempt assets to their creditors in order to pay their debts. Depending on where you live and what you own will depend on what is exempt.

The reason that you would file Chapter 7 is to discharge or dismiss your debts. However, it is important that you follow procedures closely. If you are found to have committed certain kinds of improper conduct the court may deny your discharge and, if it does, the filed bankruptcy petition will be denied.

Chapter 9 is a bit different. It involves bankruptcies for cities and towns. Therefor is not for wuite the same purpose. Cities and towns have much higher levels of debts so their guidelines deal accordingly.

Chapter 12 deals with the special cases of businesses that are vital to the community and have been in a family for a long time. Specificity family farmers and family fisherman.

Chapter 11, often referred to as reorganization, is used mainly by commercial businesses. An individual may also file chapter 11 however it is a time consuming expensive and complex procedure so they usually opt for other chapters available to them.

Chapter 13, also known as the wage-earner bankruptcy,proceedings require you to propose a repayment plan to pay back your debts. Typically you are given an average 3-5 years to complete this repayment. The plan is based on income assets expenses and debts.

Usually the discharge of debts such as fines, penalties imposed for violating the law such as court fees and restitution, student loans, child support alimony, property settlement, fraudulent debts, personal injury or death, or recent income tax debts, in general, are not allowed.

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