As you begin to delve further into financial planning and perhaps are beginning to think about filing for bankruptcy, it can seem like a completely foreign—and intimidating—a realm with a lot of new terms that are difficult to navigate. Why you should choose to file using one bankruptcy chapter over another becomes clear much more quickly, however, when you consult with a law firm experienced in bankruptcy, such as Fitzgerald & Campbell, APLC. It’s also helpful to understand what each chapter is meant for though as soon as you begin considering the process.
Most of us are familiar with Chapter 7 bankruptcy as it is the most painless, fast, and least expensive way of resolving debts, with a focus on liquidation. A discharge can usually be expected in just a few months, although you may walk away with less of your possessions as the bankruptcy trustee is in charge of seeing that many of them are sold to pay off creditors. Next comes the Chapter 13 bankruptcy. This is a little more complicated and takes more time. You are choosing to repay your debts over a period of several years—but with a structured plan, and the automatic stay serving to keep creditors from hassling you during that time. You may be able to repay most of, or all of, your debts, as well as keeping your home out of foreclosure. After that though, many may be surprised to learn how many other types of bankruptcy filing options there are as well, to include:
Chapter 9
Used by municipalities that have ended up in financial difficulty. This bankruptcy filing allows them to take a break from creditors trying to collect as they attempt to reorganize. Here, there is no requirement for selling off assets to pay off creditors; rather, this offers time for reorganization of debts, often with a variety of different extensions or refinancing options.
Chapter 11
While businesses can file under Chapter 7 for liquidation, Chapter 11 is well-known as the reorganization option for corporations. Here, they may be able to stay open for business and pay off their creditors.
Chapter 12
Meant for family farmers and family fisherman who are working, this level of bankruptcy allows such individuals to pay back debts over a three- to five-year span.
Chapter 15
This type of bankruptcy is generally connected to another one in a foreign country and allows for debts to be dealt with in the US as well. The significance of this newer chapter is that it allows for communication with courts in other countries, operating across borders.
If you are considering filing, it is best to obtain legal advice from an experienced lawyer. At Fitzgerald & Campbell, APLC, we have been dedicated to helping our clients explore their options in areas such as bankruptcy for many years. We are here to help you! Call today for a free consultation at (844) 431-3851, or email us at info@debtorprotectors.com.