“Bankruptcy is synonymous to financial losses…and that is a fact!” A very disdaining thought that many people perceive about the term bankruptcy, unless given the right supplemental thought that ‘Filing for Bankruptcy’ only with additional two pre-words, makes the concept a whole lot positive than the former one. Does bankruptcy or filing for one, results to one’s losses? In this article, we would like to present the different types of bankruptcy, and finally, give the general thought of every kind to the one filing it.
According to the book with the title, The Bankruptcy Book: The Truth About Ending Your Bill Problems And Getting Back The Good Credit You Deserve, written by Christopher McAvoy in 2010, he highlighted the types of bankruptcy commonly used in the United States, they are the following:
- Chapter 7, also known as straight bankruptcy. This is the fastest, easiest, and least expensive kind of bankruptcy.
- Chapter 11 reorganization is used primarily by businesses but also by people with substantial debts and assets.
- Chapter 12, which is used solely by family farmers as a way to reorganize their finances.
- Chapter 13 is the personal version of Chapter 11. Individuals with a regular source of income can put together a payment plan in exchange for keeping all of their property. It’s used heavily by people who are looking to save a home from foreclosure or a car from repossession.
Plus two (2) types of reorganization bankruptcy:
Chapter 11 bankruptcy can be filed by businesses who are struggling financially to restructure their affairs. It is also applicable to individuals. However, Chapter 11 bankruptcy is costly and it consumes so much time, it is commonly filed only by those people or businesses whose credit exceeds the limitation of Chapter 13 bankruptcy or who own considerable assets that are non-exempt such as some real estate properties. If you are considering Chapter 11 bankruptcy, you will need an assistance of a lawyer.
Chapter 12 bankruptcy is almost the same with Chapter 13 bankruptcy. But the difference is that, to be qualified for Chapter 12 bankruptcy, it should be minimum of 80% of your debts must appear from the operation of a farm owned by a family. Chapter 12 bankruptcy has higher debt margin to cater the extensive debts that may come with farm operation, and it offers the borrower more control to terminate several types of charges. Only few people use Chapter 12 bankruptcy; you will need an assistance of a lawyer to file Chapter 12 bankruptcy..”
If you have read the claims of Mr. McAvoy, you will notice that these types of bankruptcy have commonality, that is, to solve one’s financial dilemma or debts, and lessen the burden on the debtor/in-debted person.
Now, do you still believe that bankruptcy causes a multitude of losses? It is all about the mind-setting that one must impose in him/herself, for a better result/s. Nevertheless, one must also be assisted by a great mentor or bankruptcy lawyer such as the KT Bankruptcy Lawyer which caters the Best Bankruptcy Attorney in Irvine, or other law firms that has records of winnings in bankruptcy cases.