Chapter 7 Bankruptcy

The first type of bankruptcy is Chapter 7, which is often referred to as a liquidation bankruptcy or fresh start. This type of bankruptcy allows for the elimination of debts, such as most credit card obligations, medical bills and other debts that do not have property pledged as collateral. There are several debts which are not dischargeable under Chapter 7, including certain taxes, credit that is found to be obtained by fraud, debts not listed in the Chapter 7 Petition, alimony or child support, student loans, etc.

Chapter 13 Bankruptcy

The second type of bankruptcy is Chapter 13, which is often referred to as a wage earner consumer reorganization. In a Chapter 13 case, the debtor chooses to repay all or a portion of his unsecured debt over a five-year period. The advantage of a Chapter 13 plan is that it enables the debtor to handle debts which are not dischargeable under a Chapter 7 case, such as student loans, fraud, damages resulting from driving while intoxicated, etc. Chapter 13 is preferable when the debtor has certain non-exempt property, which would otherwise have to be surrendered in a Chapter 7 case.

Chapter 11 Bankruptcy

The third type of bankruptcy is Chapter 11, which is often referred to as a business reorganization. A Chapter 11 bankruptcy is similar in procedure to Chapter 13, except that it is available to large businesses rather than individuals.

Chapter 12 Bankruptcy

The fourth type of bankruptcy is Chapter 12, which is often referred to as a farm reorganization. A Chapter 12 bankruptcy is exclusively available to farmers. It can result in write-downs on secured property and reductions in interest rates and cash flow needs while allowing the debtor to keep all of his property.

If you have questions regarding a certain debt, or if you are thinking about filing a bankruptcy petition, please call us at 320.255.8840.