Types Of Bankruptcy

These days from all over the world we hear of cases where even large companies have gone bankrupt with the recession taking it toll on businesses and businessmen. It’s amazing therefore that even those who are filing for bankruptcy is sometimes unaware of the types of bankruptcy.

types of bankruptcies

Some appear to have taken this whole process rather lightly thinking that it is the easy way out and this is certainly not advisable. You should know that there are different ways to stop yourself from as many would call it ‘going broke’. Of course this should be the very last resort. However if you are absolutely sure that you are bankrupt you should get to know about the types of bankruptcy to know what would apply in your particular case.

If you are not aware even about the very basics it would help you to know that there are 2 main types of bankruptcy namely, chapter 7 and chapter 13 bankruptcy. Chapter 7 bankruptcy relates to a case where it’s fairly obvious. It’s commonly called ‘straight bankruptcy’. If you happen to be in possession of assets of fairly in insignificant value and has a lot of unsecured debt then this is relavent to you.

types of personal bankruptcy

Chapter 13 is the other main component when considering the types of bankruptcy. This is quite different from chapter 7. You would have to pay all or a considerable amount of your debt through your income and the time period could be anything between 3 – 5 years. Your secured debt should be less that $750000 and unsecured debt should also be less than $250000.

If your case happen to be categorized as chapter 7 among the types of bankruptcy, then most of your debt will get wiped out. However keep in mind that any debt in the form of federal tax bills or child support will have to be paid. Note that in both chapter 7 and 13 bankruptcy it will be mentioned in your credit history and this is one good reason to use it as the last resort.

Chapters 9, 11 and 12 are the some of the other lesser known items in types of bankruptcy. Chapter 9 is only for governmental units and municipalities while chapter 12 is for those who fall under the category ‘family farmers’. Chapter 11 on the other hand is relavent to those individuals with substantial incomes and assets.

types of bankruptcy

Choosing the correct chapter among the types of bankruptcy is one very important task that would be determined by your circumstances and if your knowledge on the subject of types of bankruptcy is insufficient it’s advisable to seek professional help because the matter in question is one which happens to be very delicate.