Common Types of Bankruptcy

That’s Available To The Public

by: www.newhorizon.org

Often financial obligations can get out of hand. Either consumers and companies are confronted with the truth that there's absolutely no way they are able to repay the things they owe.

That’s when declaring bankruptcy turns into their only choice.

Nevertheless, you must keep in mind that declaring personal bankruptcy will not restrict criminal prosecution or terminate tax responsibilities.

Also, chances are you'll not use bankruptcy as a reason to excuse yourself of your obligations for your children or spousal support.

Different Kinds of Bankruptcy

Chapter 7Among the 5 kinds of bankruptcies, this one is considered the most simple. A person, a married couple or business partners can apply for this proceeding.

Before submitting an application, the person or the group will be questioned by a representative from a Consumer Credit Counseling Agency.

He will be forced to make an appearance on court. It typically takes around three and a half months until the proceedings are completed.

Later on the person will be announced exempt from past unsecured financial obligations. He will then be given a trustee who will be responsible for determining which of his property will be excused from bankruptcy.

The remainder of his property will then be sold and allocated among his creditors.

Chapter 9This kind of bankruptcy proceeding especially deals with cities.

Under the bankruptcy code, a town could be a political community or a public bureau.

Since it involves a larger group, this type is much more complicated than the other bankruptcies.

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http://www.newhorizon.org/credit-info/the-5-different-kinds-of-bankruptcy/

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