With so many chapters of bankruptcy out there sometimes it's hard to know which is which
Nine Chapters of Bankruptcy
Someone new to the bankruptcy process probably will not know the difference between the different chapters of bankruptcy. To help you out, here's a list of nine different chapters of bankruptcy.
Some of them are common, and some of them you've probably never heard of before
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is often referred to as a liquidation. In this type of personal bankruptcy, assets can be sold off, or liquidated, in order to repay debts. An individual will have to undergo a "means test" to file this type of bankruptcy.
Chapter 9 Bankruptcy
This type of bankruptcy has to do with cities or towns. This type of bankruptcy is very rare, and only a few instances are filed each year with federal courts.
Chapter 10 Bankruptcy
This type of bankruptcy isn't as popular as Chapter 11 bankruptcy, but it deals with small business reorganizations.
Chapter 11 Bankruptcy
This is a very popular type of business reorganization bankruptcy. The company is typically reorganized while the debtor remains in control of the business.
Chapter 12 Bankruptcy
Another little known type of bankruptcy, it has to do with family owned farms. Only a family owned farm can file for Chapter 12, and the farm must have less than $1.5 million in debt.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a very popular type of personal bankruptcy in which debts are reorganized. A repayment plan is developed in which the debtor repays its debts over a three to five year period. Typically individuals keep their cars and homes.
Chapter 20 Bankruptcy
This is a slang term for someone who files for Chapter 7 bankruptcy shortly after filing for Chapter 13 bankruptcy.
Chapter 22 Bankruptcy
Another slang term describing a company that has filed for Chapter 11 bankruptcy twice.
Chapter 33 Bankruptcy
Chapter 33 Bankruptcy is similar to Chapter 22 bankruptcy, but it is used to describe a company that has filed for Chapter 11 bankruptcy 3 times.
It's easy to eliminate some of these chapters of bankruptcy when choosing which one might be best for you, but narrowing down which is the perfect one for your situation can be difficult. That's why it is important to have a good bankruptcy attorney on your side. Most people get to keep their home and vehicle in bankruptcy, but you need to take the appropriate steps to benefit the most from bankruptcy. The ins and outs of bankruptcy are quite extensive, so contact a bankruptcy attorney to make sure you take the appropriate steps to a fresh financial start.