Bankruptcy Lawyer in Bristol, CT
What Are the Different Types of Bankruptcy?
Bankruptcy is a difficult thing to go through. Each year there are hundreds of thousands of bankruptcies declared in the United States. It’s important to understand the different types of bankruptcies and who declares which. By understanding better, you or someone you know can be more informed about bankruptcy if you have to file for it at some point. The important thing to understand though is that filing for bankruptcy doesn’t have to be difficult. It can also help relieve the burdens and stress from debts. For assistance with a possible bankruptcy reach out to a bankruptcy lawyer in Bristol, CT from The Law Offices of Ronald I. Chorches.
Individual Declarations of Bankruptcy
When an individual files for bankruptcy it’s generally through one of these two different types. Those types are chapter 7 bankruptcy and chapter 13 bankruptcy. The differences between the two are:
Chapter 7 is considered the most commonly used form of bankruptcy that an individual files for. Under this bankruptcy declaration, a court will appoint a trustee to confirm the sale of assets to receive the funds to pay off creditors that are owed by the debtor. Another term for this is liquidation in order to pay off creditors. Credit cards, as well as bills relating to medical purposes, are generally wiped out. However, students loans and taxes are not a part of things that are wiped out and still must be paid back at some point.
Chapter 13 bankruptcies differ from chapter 7 in that instead of having to liquidate assets the debtor is put under a monthly repayment plan. This plan is generally for a fixed state of time up to 5 years. The amount someone has to pay also depends on their income and also how much money they owe.
Business Declarations of Bankruptcy
Businesses and corporations fall under different categories when it comes to bankruptcy. The two most commonly used bankruptcy types for businesses and corporations are chapter 11 and chapter 12. These two types have quite a few differences like:
A Chapter 11 bankruptcy is used for organizations and businesses that are reshuffling financially. They must come up with a plan for how they will continue operations while in bankruptcy as part of their approval process from a court and from the creditors.
This type of bankruptcy is reserved for fishermen and farmers. It allows both entities to repay their debts through a plan without having to sell off assets and property.
Other Forms of Bankruptcy
Some other forms of bankruptcy are chapter 9 and chapter 15. Chapter 9 is a way for towns, cities, school districts, and municipalities to repay their debts. Chapter 15 is used for international bankruptcy and on average only has about 100-200 filings each year for this type of bankruptcy. Reach out to The Law Offices of Ronald I. Chorches for assistance with filing for bankruptcy and to learn more about the process today.