Understanding the Types of Bankruptcy

A problematic business manWhen you’re going through a rough patch in life, it is normal to consider filing for bankruptcy. It can be confusing, as there are so many options to take. Asking a skilled attorney for any legal help is advisable.

Below is a list of the most common types of bankruptcy that you can file for. Each has its own benefits, but you must choose the one that is most suitable to your current circumstances.

Chapter 7

This type has a very quick process time of only around less than half a year or so. It is commonly known as liquidation as well. Chapter 7 lets you save your nonexempt assets and not pay for dischargeable debts, such as hospital dues. It is popular among those with lower salaries or income. A Chapter 7 bankruptcy attorney in Utah will help you understand this option better.

Chapter 11

This type of bankruptcy is ideal for people and businesses but is more frequently used by businesses. Chapter 11 commonly goes by its second name, reorganization, because it reconstructs the person or business’s debt so that they can create a timeline to pay back their dues while still having assets with them. A great benefit from this is that you may keep your business as you pay back what you owe while leaving some control to certain individuals, such as the people you are in debt to.

Chapter 13

This is similar to Chapter 11, as you must make a proposition for a period that you plan to repay your debt, which is usually around three to five years. Certain debts will be alleviated from you that you can’t do from Chapter 7 while keeping all of your available assets.

These are just a few types of bankruptcy that you can file for, but you can always ask for helpful advice from lawyers who are practicing in this field.