subject: Other Types Of Bankruptcy That Bankruptcy Lawyers Long Beach Can Help You With [print this page] When seeking the council of bankruptcy lawyer Los Angeles in regards to financial dire straits, they usually either recommend a Chapter 7 or Chapter 13 bankruptcy, as they are the most common both for individuals and businesses. What few people know, however, is that there are several different kinds of bankruptcies, spelled out in detail in the Bankruptcy Code, that are used in few or rare instances.
Chapter 11 bankruptcy is essentially a reorganization of debts filed most often by businesses, business partnerships and corporations. Its also possible for individuals to file for Chapter 11 bankruptcy, but this is exceedingly rare.
Chapter 11 is very similar to Chapter 13 in that it helps the debtors reorganize their repayment options in a way that will better help them pay their creditors. One difference between Chapter 11 and Chapter 13 is that Chapter 11 does not contain the debt limits that Chapter 13 is privy to. Chapter 11 also doesnt require a means test like Chapter 7 bankruptcy. Chapter 11 bankruptcy applies to high-income businesses with a substantial amount of debt, which explains why this chapter is more likely to be used by businesses that produce a high income than by individuals
To file for Chapter 11, your business will have to sign a petition with your local district bankruptcy court. Bankruptcy lawyers Long Beach will advise you to attach forms that state your assets, expenses, debts and total income along with the petition.
Chapter 11 bankruptcy also allows you to keep your business running while repaying your debts.
Chapter 12 bankruptcy, also known as Family Farmer or Family Fisherman bankruptcy, is designed for family farmers or fishermen who have a regular annual income.
Chapter 12 eliminates the debt barriers that Chapter 13 has. Chapter 12 is less complicated repayment method, as well as less expensive. Whereas Chapter 11 is for high-income businesses, Chapter 12 is far more suited towards lower-income families struggling with their finances. Those who qualify for this law also often have seasonal work, so this law adjusts its repayment plan with that in mind.
Those who are eligible for Chapter 12 are either an individual worker, and individual and spouse, or a business partnership. Like with Chapter 11, individuals or businesses filing for chapter 12 must provide a petition along with lists of their assets, expenses and debts.
Chapter 9 bankruptcy is filed by municipalities that are in financial trouble. Chapter 9 sometimes happens when a tragedy or natural disaster strikes the town, or if the towns municipal finances were handled poorly or fraudulently. Chapter 9 goes about to protect not only the creditors and debtors, but also the public and the towns residents. Like Chapter 13, the courts posit a restructured repayment plan for the municipality, thus averting the communitys collapse.
These three types of bankruptcy dont happen often, yet knowing what they are can be useful. For instance, if you hear about a large corporation filing for a Chapter 11 bankruptcy, youll know what that means, as well as the main differences between Chapter 11 and the more popular Chapter 13. Knowing the main differences between different bankruptcy filings will allow you to choose the best one for you.
