Filing Personal Bankruptcy Help

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.

The most common Chapter under which individuals file is called Chapter 7. Generally, individuals file under this type, but some corporations are also eligible to file under this type as well. Chapter 7 is known as a type of “liquidation bankruptcy.” This means that items deemed non-exempt will be sold. The purpose of this is to attempt to pay back as much of the individuals debt as possible. After this liquidation, and unpaid debt will be discharged.

The next type is usually associated with businesses. This is known as Chapter 11. Some people may qualify for this, but is usually reserved for businesses. In this case the assets of the debtor are not liquidated. Also, their functioning businesses are to be maintained in their typical, working order. But, a plan is put into place that will allow the business to pay off their debt, as to eliminate what they owe.

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.

Last, we have Chapter 13. This is similar to Chapter 11 in many regards, although this type is aimed at individuals. Like Chapter 11, the debtor is able to keep their assets. A 3-5 year payment plan is put into place. It is possible that some of this debt will be discharged, but that depends on the situation. Limits are put into place, depending on the amount of debt that is involved in the process.

When you first begin exploring your options in regards to possibly filing for bankruptcy, you may become discouraged. But, as the proper steps begin to be taken, you will find an appropriate path through your troubling financial crisis. As you discuss these options with your attorney, you will find the appropriate course of action. Of course, hiring an attorney is optional, but the risks of making mistakes should discourage you from attempting this task alone. If you find that bankruptcy is your only solution, consider your options carefully and take the appropriate actions.

Enrique Castillano also writes about Bankruptcy and Credit issues including File Personal Bankruptcy and Claiming Bankruptcy

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