An Overview of the Different Types of Bankruptcies | Richard Banks & Associates, P.C.

Not all bankruptcies are created equal, and for those considering filing, it can seem both overwhelming and confusing. Have no fear, Richard Banks & Associates is here to help you make sense of all the bankruptcy options out there and decide on which one is best for your situation.

The rates of those filing for bankruptcy has been declining, but there were still just under 800,000 bankruptcy cases filed in recent years. We can help those considering Chapter 7, Chapter 13 or Chapter 11 bankruptcy.

Chapter 7

Chapter 7 is the most popular way to file bankruptcy because it often involves no repayment of debt. You can use this method to find relief from credit card debt, medical debt and more, and it is usually referred to as a straight bankruptcy.

Those filing Chapter 7 can enjoy a fresh start and enjoy it quickly! Remember, Chapter 7 can immediately put a stop to creditor harassment, foreclosure and repossession, and bank levies and wage garnishment. In 2017, there were 472,135 Chapter 7 bankruptcies filed.

Chapter 13

When filing Chapter 13, you are reorganizing the debt and creating a payment plan that works with your income. This form of bankruptcy can run for three to five years and provides you with the opportunity to pay off debts with a lower interest rate.

Keep in mind, since Chapter 13 is based off your income, there is the possibility that not all your debts will be eliminated at the end of the repayment period. With Chapter 13, there is absolutely no risk of losing property when filing. In 2017, there were 294,500 Chapter 13 bankruptcies filed.

Chapter 11

This form of bankruptcy is for businesses that are facing financial problems due to reduced sales and reduced profits, as well as tax issues. Much like Chapter 13, Chapter 11 allows the business the opportunity to reorganize its debts, while still operating.

To continue operating, a business must be generating enough revenue to meet the financial obligations that were set up in the reorganization plan.

Whether you are looking to regain control of your personal debts or trying to reorganize debt so your business can stay afloat, know that you have options thanks to these various forms of bankruptcy. Want to know more about how each one could benefit you? Contact the bankruptcy lawyers at Richard Banks & Associates today!