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Exploring The Types Of Bankruptcy

By Enrique Castillano

If you are curious about the types of bankruptcy available, it is reasonable to assume that you are enduring financial troubles. As the economy rises and falls, people are increasingly being forced to consider this avenue. This process can be very difficult and complicated. Especially for individuals unfamiliar with this process. If this is you, consider seeking professional guidance. Rest assured though, that for every type of financial woe a person can find themselves in, a different type of bankruptcy will be available to you.

The process of filing for bankruptcy will consist of four different type of “Chapters” under which you will have the ability to file under. As you and your attorney examine your situation, you will make the appropriate decision that is best for you and your family.

First we will address what is known as Chapter 7 bankruptcy. This is the most common Chapter under which individuals file. It is a type of liquidation bankruptcy, meaning that non-exempt assets must be sold in order to pay as much of the debt as possible. What is left unpaid after liquidation is discharged. Individuals and corporations are eligible for this.

Next we have Chapter 11. This is usually reserved for business and partnerships, but some people may be able to file under this type also. Under chapter 11, the assets under the possession of the debtor are allowed to be kept. Also, all business-related practices are to be functioning as normal. The goal of this type of Chapter is for the debtor to form a goal of paying back the creditor. This type can become very complex, perhaps the most complex of all of the types.

Chapter 12 bankruptcy is a very specific type of bankruptcy. This type is only in regards to farmers, in which they are also allowed to maintain their assets/farms and a plan to repay their creditors is explored.

Lastly is Chapter 13. Chapter 13 is established for individuals. Under this type of bankruptcy the person will also keep their assets and be allowed to function regularly. There will be a plan to pay off the debt. This plan usually ranges between three and five years. It is possible that some of the debt owed by the person could be discharged, but that will be determined after examining the debtors situation. Depending on the debt, limits will be installed.

Although on the surface filing for bankruptcy seems complicated and daunting, further exploration will reveal that your options are fairly obvious. It is advisable that you speak with an attorney and discuss your options. It is a very unfortunate situation to find yourself in debt, but before filing for bankruptcy, you must consider it your last option, as the impact of it will be with your for many years. If bankruptcy is your only option, weigh your choices carefully and make an intelligent decision.

Enrique Castillano also writes about Lawyers, Bankruptcy and Credit issues including Abogados and Abogados Gratis

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Article Citation
MLA Style Citation:
Castillano, Enrique "Exploring The Types Of Bankruptcy." Exploring The Types Of Bankruptcy. 6 Jul. 2010. uberarticles.com. 3 Aug 2014 <http://uberarticles.com/finance/bankruptcy/exploring-the-types-of-bankruptcy/>.

APA Style Citation:
Castillano, E (2010, July 6). Exploring The Types Of Bankruptcy. Retrieved August 3, 2014, from http://uberarticles.com/finance/bankruptcy/exploring-the-types-of-bankruptcy/

Chicago Style Citation:
Castillano, Enrique "Exploring The Types Of Bankruptcy" uberarticles.com. http://uberarticles.com/finance/bankruptcy/exploring-the-types-of-bankruptcy/


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