Filing for bankruptcy is a life changing decision. It can effect your personal and professional life in a number of difficult ways. Sometimes there is no other way out. Understanding bankruptcy and all the Chapters that you are able to file can get confusing. If you are using a lawyer, they may start speaking to you in terms that you do not understand. If you are filing on your own, you will definitely need to know what it is your filing for and which Chapter option is ideal for you, your business and your home situation.
Filing for bankruptcy is not as easy as you may think. There are actually four different bankruptcy filings to choose from. As most people know there are Chapter 7 and Chapter 13, these are not your only options. If you are attempting to file on your own, or simply want to understand the jargon your lawyer is speaking, you should know which each Chapter means. Chapter 7 is the most common bankruptcy filing. Chapter 7 is usually field when you are unable to pay your creditors debt. It is a liquidation process in which all of your non-exempt assets are sold, to then pay off your creditors. Chapter 7 can be filed by corporations, businesses, individuals, and married couples.
Chapter 11 is considered a reorganization, and is filed mostly by corporations and partnerships. This typically means that the debtor remains in business and is able to keep their assets. Debtors propose a plan to creditors to reorganize payments, which are than confirmed by a court of law. This than binds the creditors and debtors into a repayment plan that they must abide too. This can include a companies future profits as well as sales money from some of their assets.
Chapter 13 is for people that have a regular income. This Chapter allows you to keep your assets and property while making a regular payment that is agreed upon. The repayment plan will be based on the debtor’s income and how much of their debt is still owed. Chapter 13 is usually filed for when individuals are trying to keep the possession of their home and vehicle. It can immediately stop the foreclosure and repossession process.
Filing for bankruptcy isn’t easy. You may need to hire a professional to help you with the process. Contact a bankruptcy attorney in Thousand Oaks or a bankruptcy attorney in Woodland Hills to help you determine which Chapter will work best for you.
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