Various Chapters of Bankruptcy

Some people are truly struggling with debt, and they may not know where to turn.  Maybe, they have tried everything they can think of to get back on their feet financially, but nothing might have worked.  These people might have been considering the types of bankruptcies that might be a help for them to be back on their feet.  Creditors might be calling everyday to the debtor, and one might hate to check on their mailbox, afraid of receiving demand letters and debt collection lawsuit.  If you want to end this problem, you should start familiarizing important things about bankruptcy.  Surely, in the next few days, you will be filing bankruptcy to the court. There are various types of bankruptcies available to individuals based on the qualifications for each chapter of bankruptcy.  The different types of bankruptcies are the following: Chapter 7 Bankruptcy Also known as straight bankruptcy or liquidation bankruptcy, chapter 7 bankruptcy is often what people think about upon hearing the word “bankruptcy”.  What happens here is that, the court will assign a trustee who will oversee your case.  Part of the job of the trustee is to take your asset, sell them, and distribute your money to the creditors who file proper claims.  Of course, the trustee won’t get all your properties.  You will be allowed to keep enough for you to make a good start. Chapter 7 Bankruptcy requires you to gather all your financial records like bank statements, loan documents, Credit card financial statements paystubs.  These information will be used to fill out the bankruptcy petition, schedules, financial affairs and all other documents that will be filed with the court.  Chapter 11 Bankruptcy This chapter of Bankruptcy code generally provides reorganization.  Usually, this chapter is being filed by corporation or partnership.  Those who are involved in chapter 11 bankruptcy usually proposes a plan of reorganization to keep the business its operation and pay creditors over time.  How does it work?  A Bankruptcy Chapter 11 begins with the filing of a petition with the bankruptcy court serving the area where the debtor resides.  A petition may be filed voluntarily by the debtor , or involuntarily by the creditor.  Such case us usually filed to reorganize a business, which may be a corporation, sole proprietorship, or partnership.  And since the corporation exist separate from the owner, the bankruptcy has nothing to do with the personal asset of the owner or proprietors. Chapter 13 Bankruptcy Such type of bankruptcy allows the debtor to restructure debts under the protection of federal court, setting up a payment period for three to five years.  This type of bankruptcy is also known as “wage earners” bankruptcy, because you must have a regular income to qualify.  This is to help the debtor resolve some debts and get a current on secured loans  such as those loans with collateral  (home or car).