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What Are The Three Main Types Of Bankruptcy?

There are three common types of bankruptcy, each named after the chapter of the Bankruptcy Code that defines them:

Chapter 7. Chapter 7 bankruptcy (also known as liquidation) allows a person or business to eliminate virtually all unsecured debts. The debtor is allowed to keep certain exempt property and all non-exempt property is sold for the benefit of the creditors (what property a debtor can keep is outlined below). Most people who file for bankruptcy protection file for chapter 7 bankruptcy. A typical chapter 7 bankruptcy case for a person takes about 100 days (a little over three months)

Chapter 11. Chapter 11 bankruptcy (also known as reorganization) is usually for businesses or wealthy individuals and provides short-term relief from creditors in order to negotiate a plan of reorganization with creditors. A chapter 11 case is usually quite complex and most people will find that a chapter 7 bankruptcy or a chapter 13 bankruptcy better meets their needs.

Chapter 13. Chapter 13 bankruptcy is usually considered an alternative to chapter 7 bankruptcy. A chapter 13 bankruptcy is designed for wage earners with mostly consumer debt (as opposed to business debt). One of the main advantages of chapter 13 bankruptcy is that the debtor generally loses no property. Chapter 13 bankruptcy can also avoid collection efforts against co-signors and joint debtors. It may also be used to catch up on back mortgage payments or repay tax debts.

The following articles will provide more information about a particular type of bankruptcy. To discuss your situation with one of our bankruptcy attorneys, please contact us for a free consultation, click the 'Schedule' button to schedule a meeting, or submit your information for review to see if you qualify. Or select the type of bankruptcy to read more.

   
   

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