What Are The Different Forms Of Bankruptcy ?
Did you think that bankruptcy is a single procedure and one and all file for bankruptcy using the same methods? Then you are completely mistaken and it is not as easy as you though. There are 4 different types of bankruptcy that a person can follow. Several people think that bankruptcy means just letting the court know that you are bankrupt and they grant you the status. It is actually a lot more complicated than you think it is. |
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The four types of bankruptcy are Chapter 7, Chapter 11, Chapter 12 and Chapter 13.
When you file for Chapter 7 bankruptcy that means you are liquidating all your assets to pay off your debt and also there are chances that your property might be taken away from you. This happens in the case of secured loans for example. In case you want to keep your house and the car you will have to opt for a different kind of bankruptcy plan.
Chapter 11 and Chapter 12 are less common types of bankruptcy plans that are used. Usually business organizations that have huge amounts of debts use this type of plan. This is also taken up by family farmers. Under this plan a company would be most probably going for reorganization.
Chapter 13 is the most common kind of bankruptcy because it safeguards your assets and immovable properties. In this case the court will work out a payment plan for you. It is also possible that some of the debts may be written of partially or completely depending on your financial status.
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