Personal Bankruptcy Options

When a person goes to file for a bankruptcy there are bankruptcy laws that they have to sort through in order to understand the process. Many people will find a good bankruptcy attorney to assist in the process of filing and explaining the laws. In order to understand fully what the laws are it is best that the person going through the process to have a basic knowledge of the laws and dictations. The different kinds of bankruptcy laws are chapter 7, chapter 11, chapter 12, and chapter 13. Most people will file for a chapter 7 or 13 filing.

The Chapter 7 is the most used type of bankruptcy law filing that people use. This is also known as the liquidation filing. In this filing a collector comes through and collects personal belongings that are able to be sold in order to pay off the debtor's debt. Once the debt is paid that can be the rest is usually dismissed. However certain kinds of debt cannot be dismissed like child support, student loans, and debt from most court rulings.

Chapter 11 bankruptcy law is one that is used if you currently own or operate a business. Under this filing the person who owes the money will retain control over assets and items that help run the business. The owner will submit a plan for approval to the court that will restructure the payment plan of creditors who vote on the plan. If the plan is accepted by the credit people then the court has to approve the plan. When all is said and done the debt gets paid off in a timely manner.

Chapter 12 is the next filing that people should know about. This filing law is mainly for farms and farmers. This law is designed to allow the debtor to restructure the debt so it is paid off as money is earned. Eventually the debt gets paid off.

Chapter 13 is the last filing type that should be learned. There are qualifying amounts that are set in order for a person to file for chapter 13. The person filing has to have a regular income as well. Under this filing most debt will get repaid over time. If there is a debt that cannot be dismissed under this filing the chapter 7 can be used to take care of the rest. A bankruptcy attorney will be able to assist in determining which filing is best.

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