Chapter Seven bankruptcy is the most prevalent option for many individuals. By filing under this chapter, you receive a fresh start; all of your claimed debt is discharged. The debts that can be claimed must be unsecured, and if you have certain assets, they can be liquidated to repay your debt, with the residual balance wiped out. You cannot claim debts like student loans, judgments from an injury case, delinquent child support, or alimony payments. Individuals and businesses can declare Chapter Seven bankruptcy.
Chapter 11 bankruptcies are designated for corporations. Under this section, business proprietors are permitted to continue operations. Claimed debt is restructured for repayment as part of a company's reorganization. This means that the debt you owe is not eliminated, but is instead repaid according to a repayment plan.
Sometimes, Chapter Thirteen bankruptcies are conflated with Chapter Seven bankruptcies. In a Chapter 13 bankruptcy, asserted debt is not discharged. Instead, it consolidates the debts into payments based on the debtor's income. You are not required to give up your assets. Again based on your income, the court will determine how long you have to repay your debt. Following the completion of your repayment plan within three or five years, your debt is discharged.
There is also a chapter dedicated to farmers and fishermen who rely on these occupations to support their families. To qualify as a business under this chapter, your company must be owned by a single family. For individuals, occupation verification is required. Your total debt must not exceed certain limits, and you must demonstrate the ability to repay debts.
State regulations have a few extra requirements. In addition, many states require credit counseling before any chapter is granted. There are also states that require you to hire an attorney due to the complexity of particular chapters. Regardless, it is prudent to explore your options to determine what you qualify for.
If you are unable to qualify for any chapter, you have additional options. You can consolidate your debt into one manageable monthly payment. You can also negotiate improved payment terms with your creditors. Both of these alternatives can help you repay your debt in an affordable manner.
If you don't know what you're doing, declaring bankruptcy can be a complicated and lengthy process. It is essential to research the various types of bankruptcy to determine which ones apply to you. You should consult with a specialized attorney to determine precisely what you must do.""
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