When you have too much debt and no way to repay it, bankruptcy is available to help resolve this issue. But who can file bankruptcy? Although there are six chapters of bankruptcy offered in the United States, not everyone may qualify for a specific chapter. While there are benefits of filing bankruptcy, which can include diminishing or even completely erasing your debt, it is important to understand each chapter of bankruptcy in order to determine which one may be right for you. The following are the most common bankruptcy chapters filed.
1. Chapter 7 bankruptcy laws. Chapter 7 is the most commonly filed form of bankruptcy in the United States, as it offers immediate relief of all debts. According to Bankruptcy Code, Chapter 7 can be filed by anyone who resides in the United States through personal property or a place of business. Through this chapter, your creditors must immediately stop their collection attempts. Unfortunately, your property could be either partially or completely liquidated, depending on the outcome of Bankruptcy Court proceedings.
2. Chapter 11 bankruptcy information. Chapter 11 is available to individuals, but businesses mainly file for this chapter. Under Chapter 11, business affairs and assets are restructured in order to help reorganize the debt. Although the bankruptcy plan can efficiently eliminate debts, the process of filing for Chapter 11 has been known to be both lengthy and costly.
3. Chapter 13 bankruptcy rules. Chapter 13 allows individuals to pay off their debt through a payment plan which the court must approve. Your property and assets are safe from liquidation, but debt relief is not immediate. Debt relief is not always guaranteed, either, as some people are not able to continue making payments on their plan. Who can file bankruptcy in this chapter? Many individuals can file for Chapter 13 Bankruptcy, but not those whose unsecured debts exceed 383,175 dollars.
Who can file bankruptcy? In order to determine if you are eligible for a certain chapter of bankruptcy, it is important to understand what each one entails. Once you have analyzed your financial situation and determined your eligibility, you must decide which chapter you believe will help you the most. By doing so, you may finally see the debt relief you have been hoping for. References.