Understanding the Chapters of Bankruptcies
Bankruptcy has become a significant part of our society. With almost every 3rd person being filed for bankruptcy, the rate at which bankruptcies occur has rapidly increased over the past few years.
Regardless of its nature, a debt is always a debt and must be taken up as an obligation and paid off. However, in instances where people are unable to pay off their accrued debts for some reason, they will need to have alternative means to restructure their debts to remain afloat. Fortunately enough, the US government provides ease to debtors who are troubled with too many financial debts. The advantage with this is that debtors are given the chance to discharge owed money without the worry of any legal actions or collector persecutions against them. Bankruptcy laws can actually save debtors from the loss of properties.
The most common types of bankruptcies are two – Chapter 7 and Chapter 13. However, there are five types of bankruptcy in all, which are listed as follows:
This is easiest kind of bankruptcy anyone can understand. People entitled to file for the Chapter 7 proceedings include married couples, single individuals or business partners. The entire process takes an approximate of three months to complete. It requires the person filing for liquidation to appear in court and also involves an interview by the Credit Counseling Agency. Once the process is complete, the person is granted an exclusion from unsecured debts from the court. Following this, a trustee is assigned to determine what properties are to be exempted from being liquidated. The properties regarded as "non-exempted" will then be used to repay debts. Once an individual is released from the liquidation bankruptcy, he/she will not be permitted to file for another within 8 year.
This case of bankruptcy is chiefly concerned with municipalities. The code of bankruptcy states that municipalities are political subdivisions, public agencies or instrumentalities of a state. When a case of bankruptcy involves municipalities, it can become a complex case to deal with.
The chapter 11 bankruptcy is often filed by business organizations. A bankruptcy would normally involve a trustee appointed by the court; however, in the case of Reorganization Plan bankruptcy, the concerned corporation or business organizes its own reorganization plans. This will involve various repayment strategies, which includes measures of debt consolidation that are carried out in collaboration with creditors.
This type of bankruptcy can only be filed by family fishermen or family farmers that have a steady annual income. Repayment of the financial debts depends on the earnings of the fishermen and farmers, and their properties won't be used to pay off their lenders as well.
People entitled to file this type of bankruptcy are fixed wage earners. This bankruptcy proceeding allows borrowers to keep their assets. The debtors pay off their financial debts by allotting certain percentages of their income settle up lenders.
Bankruptcy processes create good home deals due to the need of selling bankruptcy homes. The interesting thing is that lenders are willing to sell off repossessed bankruptcy properties very often. It would be a good thing to look through bankruptcy home listings to get amazing price deals. After all, you never know where you may find the best price in properties that suits you.
Obligation of Paying Off Debts
Regardless of its nature, a debt is always a debt and must be taken up as an obligation and paid off. However, in instances where people are unable to pay off their accrued debts for some reason, they will need to have alternative means to restructure their debts to remain afloat. Fortunately enough, the US government provides ease to debtors who are troubled with too many financial debts. The advantage with this is that debtors are given the chance to discharge owed money without the worry of any legal actions or collector persecutions against them. Bankruptcy laws can actually save debtors from the loss of properties.
Types of Bankruptcies
The most common types of bankruptcies are two – Chapter 7 and Chapter 13. However, there are five types of bankruptcy in all, which are listed as follows:
Chapter 7 – Liquidation
This is easiest kind of bankruptcy anyone can understand. People entitled to file for the Chapter 7 proceedings include married couples, single individuals or business partners. The entire process takes an approximate of three months to complete. It requires the person filing for liquidation to appear in court and also involves an interview by the Credit Counseling Agency. Once the process is complete, the person is granted an exclusion from unsecured debts from the court. Following this, a trustee is assigned to determine what properties are to be exempted from being liquidated. The properties regarded as "non-exempted" will then be used to repay debts. Once an individual is released from the liquidation bankruptcy, he/she will not be permitted to file for another within 8 year.
Chapter 9 - Municipality bankruptcy
This case of bankruptcy is chiefly concerned with municipalities. The code of bankruptcy states that municipalities are political subdivisions, public agencies or instrumentalities of a state. When a case of bankruptcy involves municipalities, it can become a complex case to deal with.
Chapter 11 – Reorganization Plan
The chapter 11 bankruptcy is often filed by business organizations. A bankruptcy would normally involve a trustee appointed by the court; however, in the case of Reorganization Plan bankruptcy, the concerned corporation or business organizes its own reorganization plans. This will involve various repayment strategies, which includes measures of debt consolidation that are carried out in collaboration with creditors.
Chapter 12 – Family Fisherman or Family Farmer Bankruptcy
This type of bankruptcy can only be filed by family fishermen or family farmers that have a steady annual income. Repayment of the financial debts depends on the earnings of the fishermen and farmers, and their properties won't be used to pay off their lenders as well.
Chapter 13 – Wage Earners Payment Plan
People entitled to file this type of bankruptcy are fixed wage earners. This bankruptcy proceeding allows borrowers to keep their assets. The debtors pay off their financial debts by allotting certain percentages of their income settle up lenders.
Bankruptcy processes create good home deals due to the need of selling bankruptcy homes. The interesting thing is that lenders are willing to sell off repossessed bankruptcy properties very often. It would be a good thing to look through bankruptcy home listings to get amazing price deals. After all, you never know where you may find the best price in properties that suits you.
