Types of Bankruptcy
The following is not all inclusive. It is a short summary of the bankruptcies most commonly filed.
Chapter 7 Bankruptcy-You file with the court forms that list all of your assets and liabilities together with the answers to questions about your financial affairs. A trustee is appointed to administer your bankruptcy estate. The trustee's job is to obtain as much as possible for your unsecured creditors. As in all bankruptcies, you are entitled to exempt (keep) some of your property. We will discuss the procedure including exemptions with you. In all bankruptcies, upon filing, an autotmatic stay goes into effect that prevents your creditors from proceeding to collect their debt without permission from the bankruptcy court. The object of all bankruptcies is to obtain a discharge from your debts.
Chapter 13 Bankruptcy- If you're above the median family income for your state you may have to file a Chapter 13. We are required to conduct a "Means Test" involving your finances to determine if you are eligible for Chapter 13 and, if so, how much you are required to pay unsecured creditors over a 3 or 5 year period. We file a Chapter 13 plan for you that details this. A trustee is appointed to administer plan payments and distribution to creditors. The court must confirm the plan. At the end of the plan period if you have complied with its terms you receive a discharge from your debts even though in some cases all of your debts have not been fully paid through the plan.
Chapter 12- Like a Chapter 13 but only for farmers and family fisherman.
Chapter 11- Reorganization - Used by businesses and some individuals. As with Chapter 13 and Chapter 12 the court must confirm your plan under strict guidelines.