subject: Different Categories Of Bankruptcy Filings [print this page] Why would anyone opt to file for bankruptcy? It is a last resort for entities that are unable to repay their debts because of difficult circumstances. It is not a way to escape debts the US court would only accept your bankruptcy filing if you have genuine reason for not being able to pay back your debts.
You need a proficient bankruptcy attorney practicing in your city, i.e. Chicago, to deal with the filing and subsequent procedure. Before you talk to an attorney, here are the types of bankruptcy filings you can opt for under the Federal Bankruptcy Code.
Chapter 7 Known as "liquidation", this process involves repayment of debts after the court-appointed trustee sells off the debtors assets (non-exempt only). However, before the repayment, court costs require to be cleared.
Chapter 9 This plan helps to adjust the debts of a municipality (towns, cities, villages, etc) that suffers from financial problems. The strategies in use include extension of debt maturities, obtaining a new loan to refinance and reduction of principal/interest amount.
Chapter 11 Specially designed for partnerships and corporations, this bankruptcy is complex in nature. This type of bankruptcy gives the entity the time to restructure their functioning and repay their debts.
Chapter 12 Meant for "family farmer" or family fisherman, the bankruptcy aims at helping these people get out of debts. The repayment plan involves paying off all or part of the debts within a period of 3-5 years.
Chapter 13 Known as the "wage earners plan", this category of bankruptcy is for people with a regular income. You have the option of repaying your debts, part or whole, without upsetting your financial situation.
Chapter 15 The Bankruptcy Abuse Prevention and Consumer Protection Act (2005) initiated the use of this particular filing. Known as Chapter 15 Ancillary and Other Cross-Border Cases, this plan is for companies, filing for bankruptcy, that have assets in different countries.
Only a competent Chicago bankruptcy attorney can help you understand which category of filing suits your needs. In most instances, individuals opt for either Chapter 7 or 13. Your attorney can take care of the filing procedure, assess your financial position, advice you on the repayment plan (if any), and help you get ready for the credit counseling session, and so on. If you feel no way out of your debts, the first thing to do is talk to an attorney specializing in bankruptcy laws immediately.
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