What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy provides a viable option for those who are unable to qualify for Chapter 7 bankruptcy, or for those who wish to keep their assets while still being able to get a better handle on debt. Chapter 13 bankruptcy has become a very common form of consumer bankruptcy since changes to the bankruptcy code in 2005.

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What is Chapter 7 bankruptcy?

Chapter 7 is the bankruptcy provision most frequently used by individuals. Those who reside in, or own property or a business in, the United States can file for Chapter 7 bankruptcy. Chapter 7 involves the complete liquidation of a debtor’s property to pay creditors and wipe out remaining debts, giving the debtor what’s known as a fresh start. It’s important to know that Chapter 7 bankruptcy will stay on a person’s credit report for ten years. However, it is likely that if you believe you need to file for bankruptcy, your credit has already been affected by your high debt.

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What is Chapter 12 bankruptcy?

Chapter 12 of the Bankruptcy Code is entitled “Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income.” Chapter 12 is designed to help financially distressed family farmers or fishermen who have a regular source of income to repay their debts. Read on for more information on Chapter 12 bankruptcy filings.

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Pros and Cons to Chapter 7 and Chapter 13 Filings

There are several advantages and disadvantages to Chapter 7 bankruptcy and Chapter 13 bankruptcy. One advantage to a Chapter 7 filing is that the amount of debt you can erase is not limited; whereas with Chapter 13 Bankruptcy it might be that you keep all of your property, both exempt and non-exempt.

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What is Chapter 11 bankruptcy?

Chapter 11 is one of the chapters of the US Bankruptcy Code that provides protection to debtors. Chapter 11 bankruptcy is almost exclusively used by businesses due to the expense and complexity of filing for this chapter of bankruptcy. It is appropriate when a business needs to restructure the debts it has and reorganize its finances so it can stay open.

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What is involuntary bankruptcy?

Involuntary bankruptcy occurs when a person or business owes money to creditors, and those creditors request that the debtor file bankruptcy. The creditors requesting involuntary bankruptcy feel this is the only way they will collect on what they are owed. The creditors make the request by filing a petition in court, and if the petition is approved, the bankruptcy becomes a legal requirement for the debtor.

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What are the various types of bankruptcy?

There are several different types of bankruptcy procedures and each is known by the title of the chapter of the Federal Bankruptcy Act in which they appear. Each Chapter contains a different set of laws and rules. The two most common types of bankruptcy are Chapter 7 and Chapter 13.

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What are some alternatives to bankruptcy?

There are a number of different strategies for handling debt, and there are alternatives to bankruptcy. For starters, contact your creditor(s), ask for their cooperation, and try to work out different payment arrangements or options for bankruptcy.

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What Are the Various Types of Bankruptcy?

With most Americans living paycheck to paycheck, it is no wonder that so many end up behind on their bills and under a mountain of debt before they know it. If this sounds all too familiar to you, you may be contemplating bankruptcy in order to give yourself a fresh start.

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