Bankruptcy; this is music to no one’s ears and you may be wondering what chapter bankruptcy to file! This is a very common question and a great one to ask; there are many types of bankruptcy and it is imperative that you file for what is best for you. The most common forms of bankruptcy are chapters 7 and 13 however; there are also chapters 9, 11, 12 and 15. You are probably now wondering where to begin! Typically, you will only need to consider chapters 7 and 13 but I will give a brief synopsis of all and that will hopefully guide you to a more educated decision.
Chapter 7 bankruptcy mainly entails the removal of all debts; excluding some debts such as student loans, child support, taxes and fines from criminal activity/charges. You will probably have to liquidate most of your assets as well.
Chapter 9 bankruptcy is for town, cities, school districts and so on. Filing for chapter 9 bankruptcy will act a lot like debt consolidation and it will reorganize loans to make them more affordable. This can be done by changing interest rates, refinance or extending the length of the loan.
Chapter 11 bankruptcy is for rearranging debt to make it payable. While an individual may file this type of bankruptcy is typically used by businesses. The fees for filing are higher and you receive less assistance in relieving debt.
Chapter 12 bankruptcy is catered to family farmers and fishermen and it is similar to chapter 13 bankruptcy. This is because it will allow them to keep their farm or property while having a plan set up to pay off their debts over the course of three to five years. If you are a farmer, debt of the farm must not exceed $3,792,650 in secured and unsecured debts. If you are a farmer the operation may not be in debt greater than $1,757,425.
Chapter 13 bankruptcy, as mentioned earlier is very similar to debt consolidation. Both will impact your credit report and both make debt more manageable. However, you are probably beyond debt consolidation if you have already attended the credit counseling required to file for any bankruptcy without any benefit. You must not exceed $360,475 in secured debt and $1,081,400 in unsecured debt. It can help you retain your home rather than go through foreclosure and will set up a plan to pay off debt over three to five years.
You should have better idea of the types of bankruptcy and have a general notion of what you may and may not qualify for. When trying to determine what chapter bankruptcy to file for it is always best to seek professional guidance and I highly suggest contacting Universal Finance for all of your bankruptcy needs.
