Filing for bankruptcy can be a relief for some individuals who feel as if there is no way out of their financial burdens. Bankruptcy is a federal debt relief process that will allow individuals or businesses to eliminate or reduce their debts. In most cases, bankruptcy is imposed by court order and is then initiated by the debtor.
There are five types of bankruptcies that individuals may file for. Listed below are the types and meanings of each one.
Chapter 7– Known as a liquidation, chapter 7 is the most commonly filed bankruptcy among individuals. With a chapter 7, a trustee collects the debtor’s nonexempt assets and uses the value of the assets to pay back the creditors.
Chapter 13 – This is designed for an individual who has income and a desire to pay back the debts but is currently unable to do so. Chapter 13 allows the individual to keep a valuable asset such as a home and for a payment arrangement to be made among the court’s decision.
Chapter 12 – Chapter 12 provides debt relief to family farmers with a regular annual income. This one is very similar to chapter 13 due to both bankruptcies allowing the debtor to arrange a payment plan over an extended period.
Chapter 11 – Chapter 11 bankruptcy law in New Market applies to commercial businesses that want to continue business operations while repaying creditors through a court organized repayment plan.
Chapter 9 – Only cities, towns, villages, counties and taxing or school districts to file. Chapter 9 is similar to chapter 11 in that it has a reorganized plan of payment.
Chapter 11 bankruptcy law in New Market may feel overwhelming and confusing; however, should an individual wish to file for any of the bankruptcies, it is important they understand the laws implied before making a decision. The best way to do so is to schedule an appointment with a professional. There are numerous ways to get into contact with a professional such as online or through a referral basis. Act quickly to relieve yourself from stressful and burdensome financial obligations.
