What are the different types of bankruptcy?
What are the different types of bankruptcy?
There are several different types of bankruptcy, and the most common one is Chapter 7. Chapter 7 bankruptcy is the best option for those with low incomes and few assets. The most important thing to remember is that you must pass a means test in order to qualify for this type of bankruptcy. Otherwise, your liquidation petition may be denied. If you have income and assets that you can't afford to lose, you may be better off choosing Chapter 13.
Chapter 7 bankruptcy is a liquidation proceeding, which means that the trustee will sell assets in order to pay back debt. Property that is protected under state law will not be included in the liquidation process. Chapter 11 bankruptcy, on the other hand, allows a debtor to continue operating while reorganizing his finances. It is generally the most costly and lengthy type of bankruptcy. Chapter 11 bankruptcy is usually only filed by businesses. It requires attorneys and court fees and can take several years.
The other type is Chapter 13 bankruptcy, which is known as a wage-earner bankruptcy. In this type, you have to pay back your creditors through a repayment plan, which can take up to three or five years. In order to be eligible for Chapter 13 bankruptcy relief, you must have a regular income and a certain amount of debt.
If you have any questions or need a Bankruptcy Attorney, please call this law firm for a free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
