Friday, July 16, 2010

Bankruptcy Questions

What are the different bankruptcy chapters?

Most consumers are faced with the decision to file for Chapter 7 or Chapter 13 bankruptcy. There is also Chapter 11 bankruptcy, but that is generally reserved for businesses.   Chapter 9 are for cities and muncipalities, Chapter 12 are for family farmers and Ch 15  are  fore foreign enities with debts in the United States.

Chapter 7 is also known as a liquidation bankruptcy, in which most of your assets are auctioned off to pay your debts. You are allowed to keep certain assets by law. Chapter 13 is also known as reorganization bankruptcy, in which you work with your creditors to establish a repayment schedule for your debts. Of the two, Chapter 7 is the most common form of consumer bankruptcy.