What Type Of Bankruptcy Is Right For You?

What Type Of Bankruptcy Is Right For You?

If you're considering filing for bankruptcy, there are many questions to be asked before the process starts. Chief among them is what type of bankruptcy proceeding is right for you? Chances are you've heard of Chapter 7, Chapter 11, and Chapter 13, but do you really know what those terms mean? A qualified bankruptcy attorney does, which is why it's so important to have one on your side. The Arizona bankruptcy lawyers of McGuire Gardner, P.L.L.C. remind you of the importance of educating yourself as to the bankruptcy process, and in that spirit break down your basic bankruptcy options below.

There are two basic types of bankruptcy proceedings. The first is called Liquidation. This type of proceeding often occurs when filing under Chapter 7, and is the most common type of bankruptcy proceeding. Liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor. Upon collection, the trustee then sells it and distributes the proceeds to creditors.

The good news is that in the majority of cases involving an individual party most all of the assets are exempt, meaning there are no assets to liquidate. Thus unsecured debt from credit cards, personal loans, medical bills, etc. is discharged.

The second type of proceeding, which is seen in Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases, involves the rehabilitation of the debtor to allow him/her to use future earnings to pay off creditors. In such cases a trustee is appointed to supervise the assets of the debtor. After a bankruptcy proceeding is filed, creditors may not attempt to collect debts outside of the proceeding.

As you can see through this very brief look at bankruptcy proceedings, there is a lot to learn regarding bankruptcy law before you decide which course to take. In meeting with a qualified bankruptcy lawyer in person, the types of proceedings and rules therein discussed above will be fleshed out even more and applied to your particular situation. In doing so, your lawyer can determine which type of filing will allow you the greatest opportunity to resolve your debt issues.

If you've never considered bankruptcy, it may be the right time for you to do so. As scary as the idea may initially be, filing for bankruptcy has turned a negative situation into a positive for countless consumers just like you.

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