Different Kinds of Bankruptcy Proceedings It's the duty of the borrower to pay off everything he / she borrowed from the creditor or lender, regardless of what form of financial obligation it is. Yet in situations where the persons in debt cannot manage to pay for the money they owe because they no longer have the capability or the income source to pay for the money they owe, it would not be just to continue to squeeze them to pay out.
Due to such circumstances, conditions on various bankruptcy proceedings have been made by the U.S. government in order to make sure that individuals or organizations will be able to find protection from possible lawsuits against them. With the provisions, borrowers would manage to avoid lawsuits that lenders can file in order to get payment from them. The bankruptcy laws can save a person in debt from losing their homes and properties.
On the other hand, it is necessary to keep in mind that bankruptcy won't stop tax claims or criminal prosecution. Furthermore, alimony and child support will still continue in the course of bankruptcy.
Chapter 7 and Chapter 13 are the most common cases since they are used for individual bankruptcy. Listed below are some basic information about all of them:
Chapter 7 Liquidation
The easiest to comprehend among the bankruptcy kinds is Chapter 7. It could be used for a individual or business bankruptcy. An interview is going to be conducted by a Credit Counseling Agency representative to a person who wishes to file. An appearance in the court is also going to be required. The Chapter 7 proceeding may be finished in 3 months. The court will then give a discharge from unguaranteed debts. The assets of a person in debt will then be assessed for liquidation by a trustee. The assets which are not exempted will either be sold or given to the lenders or creditors. A person who has been released from a Chapter 7 bankruptcy is not going to be permitted to file another Chapter 7 for within eight years.
Chapter 9 Reorganization of municipality
Only municipalities may apply under this kind of bankruptcy. A municipality is described by the U.S. Bankruptcy Code as any "political subdivision or public agency or instrumentality of a State". Since it focuses municipalities, it should be a very complex case.
Chapter 11 Reorganization under the bankruptcy code
Partnerships and corporations typically file bankruptcy under Chapter 11. Usually, a bankruptcy proceeding would've a court-assigned trustee, however in the case of Chapter 11, the company will propose their own reorganization plans. The reorganization plan may include debt consolidation, plans on how to pick up business productivity, repayment plans such as merging, property auction plan, and other measures available that is going to increase finances.
Chapter 12 Adjustment of debts of a family farmers or family fisherman
As stated, it's exclusive for family fishermen and farmers, which are having financial problems but still maintain a fix source of earnings. With this particular bankruptcy proceeding, an individual's properties will neither be seized nor liquidated; instead, repayments will be made from the forthcoming income.
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San Antonio Attorney-
San Antonio BankruptcyChapter 13 Individual debt adjustment
For debtors that have a fix source of income yearly, in Chapter 13, they can retain their properties while repaying their financial debts. The debts is going to be paid back by allotting a percentage of the income to pay back the money owed.
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