Declaring bankruptcy can be a difficult decision, but sometimes it may be the one that makes the most sense for your situation. Roughly 370,000 people apply for bankruptcy each year. If you have a large amount of debt that you are unable to pay off or are struggling to make a dent in, you may want to consider if bankruptcy is the best option that can bring out the relief you need. There are specific categories that can be applicable to your situation. Here are some of the common types of bankruptcies that you could be eligible for.
Chapter 7 Bankruptcy
As one of the most common types of bankruptcy that many people qualify for, Chapter 7 bankruptcy is also known as liquidation. If you have unsecured debt, Chapter 7 bankruptcy can help you get rid of it. Unsecured debt includes debt such as medical bills, credit card bills, personal loans, and utility bills. Not everything is considered unsecured debt, so if you are not sure what kind of debt that you have and how much can be eliminated, contact a lawyer and they can help you identify what debt can be erased.
Chapter 11 Bankruptcy
As an experienced bankruptcy lawyer can explain, this form of bankruptcy is suitable for business owners. When businesses get into financial difficulties and face uncertainty regarding how they will be able to continue operating, filing for Chapter 11 bankruptcy can bring much needed relief. Chapter 11 bankruptcy allows individuals who operate a company to modify their business finances and streamline their operations.
Chapter 12 Bankruptcy
For individuals who work in the fishing and farming industries, they can see if they are eligible for Chapter 12 bankruptcy. If they qualify, they will not have to sell all of their assets, allowing them to save money and prevent the foreclosure process, which is similar to how Chapter 13 bankruptcy functions. There are several key differences between how Chapter 12 and Chapter 13 bankruptcies work, so if you have any questions, a lawyer like one from Therman Law Offices, LTD can share more details with you.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows daughters to commit to a repayment plan. For the debt that cannot be discharged, chapter 13 bankruptcy allows you to reorganize your debt so that you will be able to make your payments. You can reduce your overall debt and make monthly payments over a period of time, such as three to five years and the majority of cases. If you are a homeowner, another advantage of chapter 13 bankruptcy is that it also stops the foreclosure process and lets you stay in your home.
Because there are many different types of bankruptcies to become familiar with, it is critical that you obtain personalized information from a lawyer. It is also helpful to know that you may be able to file for one type of bankruptcy if you have already completed the process for another. To learn more about eligibility requirements for bankruptcy, reach out to a qualified lawyer so that they can give you the information you are seeking.