When a person or an organization cannot repay the debts from its creditors, bankruptcy is a legal status associated with them. This situation can affect anyone. For overwhelming debts, one may take a look at bankruptcy as a chance for a new start. Of course, not committing bankruptcy is really important. You may start through small things like avoiding credit card tricks.
Bankruptcy Types Information
The United States federal courts hear and decide six different types of bankruptcy cases. The following are the popular ones:
Chapter 7 Bankruptcy. This kind of bankruptcy can be filed by business and individuals alike in order to relieve them of their repayment responsibilities. But in order to pay for their debts, liquidating their nonexempt assets to repay their debts is a requirement.
Chapter 11 Bankruptcy. This type of bankruptcy is typically filed by people in businesses. Here, restructuring the debts will happen for the possibility of repayment. This can be done without a requirement of asset liquidation. But the creditors and the court should first approve this restructuring plans.
Chapter 13 Bankruptcy. This works the same as Chapter 11 Bankruptcy but instead of businesses, it caters to individuals. To make sure that repayment will happen, restructuring the debts will be made. There will be then no requirements of asset liquidation like the Chapter 11 Bankruptcy. What is required is for an individual to pay all of the debts or at least a percentage.
Listed down below are other types of bankruptcy that caters to certain types of people:
Chapter 9 Bankruptcy. This is also called municipal bankruptcy. Municipalities can benefit a lot from this. It will help them in settling their municipal debts.
Chapter 12 Bankruptcy. This type will be beneficial for farmers, fishermen, and their family with mechanisms similar as Chapter 13 bankruptcy.
Chapter 15 Bankruptcy. International organizations and individuals who keep it running can benefit from this type of bankruptcy. Problems regarding bankruptcy debtors and foreign debtors who wants to clear debts can find help through this type of bankruptcy.
All this information can be overwhelming. As this can happen to anyone, one must remain strong for this. In fact, people from Arizona have enlisted the help of lawyers to help them in facing their Arizona Bankruptcy.
Source: http://www.themoneynewspaper.com/bankruptcy-information.html
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