Auto Accident Law 101

Auto Accident Law 101

Bankruptcy By The Numbers: Understanding The Differences Between The Types Of Bankruptcy Filings

Everett Cook

If you are thinking about filing for bankruptcy, you may have wondered the differences between the bankruptcy filing types: chapter 7, chapter 13, chapter 11, and chapter 7. In addition to these two, there are also other types of bankruptcy, which you may have heard about on the news. Here is a breakdown on the various types of bankruptcy.

Chapter 7

This is a called a liquidation or straight bankruptcy. Nevertheless, bankruptcy will not wipe out most liens or mortgages. If you need to keep an item such as your home or car, you must continue these payments. In the event that you choose to get rid of the car loan, then you must concede the vehicle to the lender that holds the financing.

In a chapter 7 bankruptcy, you are seeking a release of your debt obligations. However, you will still have to pay your student loans and taxes. Releasing such debts as school loans and taxes is determined by the exact age of the outstanding loan and other variables. Therefore, an entire review of all your debts has to be done to see what will remain after you file for bankruptcy.

Chapter 13

In a chapter 13 filing, you will promise to pay some or all of your debts over three to five years. Your bankruptcy lawyer will set up a chapter 13 payment plan for you to follow. The debts that you do not pay as part of the plan will be wiped out.

Nevertheless, home mortgages and most long-term debt have to be paid within their regular monthly payments. Upon finishing the chapter 13 plan, your long-term debt will still remain and you will continue on-going payments.

Chapter 11

Companies file Chapter 11 bankruptcy so that they could still operate while reorganizing their debts. Chapter 11 cases are undoubtedly the most complete type of bankruptcy so there are not many law firms that manage them. However, there are many people and businesses that cannot get the relief they require under chapter 7 or chapter 13, so a chapter 11 is their most suitable choice.

Chapter 12

Commercial fishermen and farmers file Chapter 12 bankruptcy so that they can still operate their farms and fisheries while reorganizing their debt. This type of bankruptcy filing allows the commercial fishermen and farmers to make payments gradually as they are making money.

Bankruptcy should not be taken lightly. If you are considering filing, contact a bankruptcy lawyer to help you further understand the differences in bankruptcy types. A bankruptcy lawyer, such as someone from Reppe Law Office, will also explain the filing process to you.


Share

2018© Auto Accident Law 101
About Me
Auto Accident Law 101

After being involved in a serious auto accident with a drunk driver, I struggled heavily with getting the driver's insurance company to open a claim. When the insurance company started pushing back, I knew I needed to do something. I spent a lot of time digging through the laws surrounding auto accident claims so that I knew what my legal rights were. I even talked with an auto accident attorney. I created this site to teach others about what I learned, including my court experience. I hope it helps you to determine how you should proceed with your auto accident case.

Archive
Categories