There are six different types of bankruptcy that a person may consider when they are in a difficult financial situation. However, certain types of bankruptcy are specifically for businesses and others are geared towards individuals.
Chapter 7 bankruptcy is a process for individuals in debt that allows them to liquidate their assets in order to repay some of those debts. Chapter 7 bankruptcy requires a person to have a certain income threshold. If they exceed the income threshold, this individual may have to consider other types of bankruptcy, as they are not eligible to file for Chapter 7.
Chapter 9 bankruptcy is the Adjustment of Debts of a Municipality. This allows a municipality such as a village, town, school district, or city to reorganize their finances and get a fresh start. Another form of reorganization bankruptcy is Chapter 11. This is an option that many businesses can take in order to repay their debts while keeping their doors open.
A Chapter 12 bankruptcy is called the Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, which is pretty self-explanatory. It allows the farmer or fisherman to repay their debts over a maximum 3-year time period. These individuals can keep operating their farming or fishing business during the repayment period.
Chapter 13 bankruptcy is the option that those who have an income that makes them ineligible for Chapter 7 bankruptcy will file for. This option allows individuals in debt to repay their debts over a 3-5 year period while keeping their assets such as a home or car. Finally, there is a Chapter 15 bankruptcy, called the Ancillary and Other Cross-Border Cases, for those who are subject to international debts.
If you have questions about bankruptcy, contact our firm today.
Juan C. Velasco, Esq. is a trusted attorney who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.