Types of Bankruptcy

When people are experiencing financial difficulties, they are extremely stressed and confused about a lot of things. When looking for a way out of this predicament, you are sure to learn that the best way to go may be to file for bankruptcy. There can be no doubt that this isn’t something anyone can look forward to. However, this isn’t a particularly bad thing either. When you learn more about bankruptcy, you will see that common perceptions of this procedure are distorted by the public’s misconceptions. If you visit a home page of the Tampa bankruptcy attorneys’ website, you’ll see that taking this step can indeed be the best solution to many of your problems.

Petition to file for bankruptcyThere are several types of bankruptcy available to Americans. Each of them has its benefits. Thus, you will need to consult an expert in order to decide which one you should choose. Bear in mind that even if you like one type more than the other, you may not be eligible for it.

Chapter 7: For Businesses and Individuals

Unlike all other types of bankruptcy, Chapter 7 can be classified as either personal or business bankruptcy.

Chapter 7 bankruptcy is also known as debt liquidation because it discharges most of your debts completely. But this comes with a price. If a business files for this type of bankruptcy, all of the corporate assets are sold by a court appointed trustee to repay the debts. Personal Chapter 7 bankruptcy leaves people a chance to save some of their assets under exemption laws.

Not all debts can be discharged under this type of bankruptcy.

Chapter 11: Business Only

Also known as restructuring, Chapter 11bankruptcy doesn’t put your company out of business, but it gives you a chance to discharge some of your debts and continue operating while being carefully monitored by a court trustee.

Not all companies manage to overcome their difficulties with the limited help of Chapter 11 bankruptcy.

Chapter 13: Repaying Personal Debts

When you file a Chapter 13 bankruptcy petition, the court will discharge some of your debts and approve a repayment plan for the rest. The majority of your debts will be refinanced and you will get a chance to repay them on more favorable terms over a period of five years.

Chapter 13 bankruptcy impacts your credit score a lot less than Chapter 7.

An experienced bankruptcy attorney in Tampa will help you to choose the type of bankruptcy most beneficial for you and advise you on how to meet the eligibility requirements for it if you are yet unable to do so.

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Posted by on Jul 9 2013. Filed under Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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