Chapter seven is the most frequently filed chapter in the United States, also known as liquidation. The debtor liquidates all nonexempt assets and applies the proceeds to his or her debt. Although this is available to both individuals and businesses, businesses and partnerships typically avoid it because it disrupts normal business operations. For individuals, however, post-petition income is not required to be applied to debt, so the individual is free to start over once assets have been liquidated and applied to extant debts.
Chapter eleven bankruptcy is the go-to solution for the majority of businesses. Instead of liquidating assets, the business has 120 days after filing to present creditors with a debt repayment plan. The creditors will either approve or reject the plan; if the plan is rejected, the banks will typically overturn the decision of the creditors. If the individual petitioning for bankruptcy fails to submit a plan within the allotted time, the creditors may create a plan to which the individual must adhere. Chapter twelve is essentially identical to chapter eleven, with the exception that it is exclusive to farmers. This permits producers to continue working while simultaneously settling their debts.
The thirteenth chapter is comparable to the eleventh, but only accommodates individuals. Due to the fact that only a certain quantity of debt can be claimed, it is possible that some debt will be discharged if the debtor works for three to five years to repay creditors.
Although these descriptions and options may sound like simple debt solutions, the decision to file bankruptcy should not be considered lightly. If you have exhausted all other options and are still unable to pay your bills, you should consult with a counsel who specializes in this life-altering solution. You may be eligible for a free evaluation from a bankruptcy attorney in your area, and you should be aware that you are not obligated to proceed with the evaluation.""
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