Bankruptcy

Filing For Chapter 7, 11, 12, 13

Chapter 7

Chapter 7 bankruptcy is considered liquidation bankruptcy also known as straight bankruptcy. The debtor (individual who files for bankruptcy) basically is relieved from any future obligations on his discharged debts. The debtor can keep personal items like a house or car but he or she must the payments. Otherwise, the debtor must surrender the car.

Chapter 13

Chapter 13 bankruptcy requires the debtor to pay all or half the debts. In some cases the court allows 3 to 5 years to pay depending on the plan. On the other hand long-term debt and home mortgages must be paid on time on the normal schedule.

Chapter 11

Businesses and corporations use Chapter 11 bankruptcy in order to re-organize debts and continue operating their businesses.

Chapter 12

Commercial fishermen and farmers file for Chapter 12 bankruptcy in order to re-organize debts and continue operating. Debt payments can be paid seasonally during the point in the year where farmers and fishermen earn revenue.