News reports show that even big businesses have gone broke around the world with the disastrous impact of the recession. It’s amazing therefore that even those who are filing for bankruptcy is sometimes unaware of the types of bankruptcy.
Some appear to have taken this whole process rather lightly thinking that it is the easy way out and this is certainly not advisable. You should be aware that there are different ways to stop yourself from as many would call it ‘going broke’. Of course this should be the very last resort. However if you are absolutely sure that you are bankrupt you should educate yourself about the types of bankruptcy to know what would be relevant in your particular case.
The two common types of bankruptcy are chapter 7 and 13. Chapter 7 bankruptcy relates to a case where it’s quite obvious. It’s generally referred to as ‘straight bankruptcy’. If you happen to be in possession of assets of fairly in insignificant value and has a lot of unsecured debt then this applies to you.
Among the types of bankruptcy chapter 13 is the next commonly known item. This is quite different from chapter 7. You would have to pay all or a considerable amount of your debt through your income and the time period could be anything between 3 – 5 years. Your secured debt should be less that $750000 and unsecured debt should also be less than $250000.
If your case happen to be categorized as chapter 7 among the types of bankruptcy, then most of your debt will get wiped out. However keep in mind that any debt in the form of federal tax bills or child support will have to be paid. Note that in both chapter 7 and 13 bankruptcy it will be mentioned in your credit history and this is one good reason to use it as the last resort.
Chapters 9, 11 and 12 are the some of the other lesser known components in types of bankruptcy. Those categorized as family farmers fall under chapter 12 while chapter 9 pertains to municipalities and governmental units. Chapter 11 on the other hand pertains to those individuals with substantial incomes and assets.
The sensitive matter of bankruptcy is one which should not be handled by one with little understanding of types of bankruptcy as choosing the relevant chapter among types of bankruptcy is a vital task that depends on your particular situation.
