Filing An Individual Bankruptcy
What are the different types of bankruptcy that individuals can file?
If you're considering filing for bankruptcy, you've probably heard a lot of different terms that are all related to bankruptcy. But if you're not a lawyer or an accountant, it can be hard to know what they all mean. Here's a quick guide to the different types of personal bankruptcy, so you can decide which suits your circumstances.
Three types of bankruptcy filings exist; Chapter 7, Chapter 13, and Chapter 11. In each case, it's important to note that you can file bankruptcy in two ways: under Chapter 7 or Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is called a liquidation filing because it allows the filer to liquidate certain assets to pay off creditors. After which, they'll have nothing left but their debts.
Whether you're a consumer or a business, Chapter 7 Bankruptcy is a great way to start over. It's a legal process that relieves you of most debts. It's beneficial if you're overwhelmed by debt.
There are several factors that determine if you qualify for Chapter 7 Bankruptcy. First, you need to pass a "means test." This means you must subtract your living expenses from your income. Then, you must determine if your disposable income is enough to repay your creditors. The second stage of the means test will determine if you can afford to make meaningful payments to your unsecured creditors.
Chapter 13 Bankruptcy
Unlike Chapter 7, Chapter 13 allows individuals to keep their homes and cars. They can also reorganize some debts. However, the debts are still collected by creditors.
Chapter 13 is sometimes called "reorganization" because it allows filers to reorganize their finances to pay back creditors at better rates than possible under Chapter 7. Compared to Chapter 7, Chapter 13 filers don't necessarily have to liquidate all their assets in order to pay creditors.
The chapter 13 repayment plan will most often last for three to five years. The method will not relieve the debts of child support, alimony, or student loans.
Debtors who are considering filing bankruptcy should speak to an attorney. They will help them determine if they are eligible for bankruptcy. They should also keep in touch with the attorney.
Bankruptcy Attorney Free Consultation
If you are looking for a legal advice about filing a bankruptcy or in need an attorney, call this law firm for free consultation. We have the Best Attorneys in Utah.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
https://www.ascentlawfirm.comDisclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.
