What Are The Different Types of Bankruptcies
Filing for bankruptcy can be a difficult process to fully understand and go through. Financial issues can not only happen to people but also to municipalities, business owners, companies, large corporations, and others, like farmers and fishermen. When someone gets into financial trouble and has no idea on how they will repay their debts, bankruptcy may be their best or only option to go through with. Filing for bankruptcy is a way for debts to be wiped out. They are wiped out by making a deal with the creditors who are owed the debts. Creditors will either put the company or individual on a repayment plan or may see a liquidation process needing to be conducted. Keep reading to find out more about bankruptcy and which types are for what kinds of circumstances.
Different Types of Bankruptcies
It’s important to understand that many people have filed for bankruptcy and worked hard to repay their debts to have a clean slate financially. One of the most common forms of bankruptcy is chapter 7 bankruptcy. This type of bankruptcy is usually filed by individuals and it sees them liquidate assets to pay off debts. Things like a home may be exempt under chapter 7 but it’s best to work with a lawyer who understands the different details. Chapter 13 is the other type of bankruptcy that an individual may file for. This form will have them put on a repayment plan by the creditors to pay back their debts over a 3 to 5-year period. The amount they have to pay back each month will depend on their financial information, income, and other important details.
Other Types of Bankruptcy
A couple of other bankruptcy filing types may be filed for. Chapter 12 is filed by farmers or fishermen. It allows them to remain operational and to keep their equipment while they pay off their debts. Chapter 9 bankruptcies are reserved for municipalities, like school districts or towns, and will see them remain operational too. They will be placed on a repayment plan dependent on financial information. Chapter 11 is what is filed by large corporations and other businesses. It allows them to remain in operation while reshuffling finances and other things that can help them to pay off debts. A court and creditors will need to come to an agreement on how a chapter 11 filer will repay their debts.
Help From Lawyers
For assistance with bankruptcy filing matters, it’s important to get help from professionals or lawyers who work in that realm. Consider reaching out to a knowledgeable and skilled bankruptcy lawyer East Hartford, CT turns to in their time of need from The Law Offices of Neil Crane. Lawyers from a firm like this one have the necessary experience and skills to help clients overcome their financial burdens and get them back to running smoothly once again. Bankruptcy can have a lot of moving parts and nuances that arise. That’s why in a lot of cases it’s better to go with a professional who understands how to overcome the issues that may arise.