Bankruptcy is a scary word. But it doesn’t have to be. We all know that bankruptcy can happen to anyone, and if you find yourself in a situation where you need it, you’ll be glad that you took the time to educate yourself about the different types of bankruptcy. In this blog, we will talk about five different types of bankruptcy and what they mean for your finances in the future!
- Chapter 13 bankruptcy
This type of bankruptcy is more common than people think. Around half a million Americans file for it every year! So what does this mean? Well, to have your debts discharged, you must be able to prove that you can afford the monthly payments on a new payment schedule over a three-to-five-year period.
This type of bankruptcy is good if you have a steady income but struggle to keep up with your payments. It also allows you to keep all of your assets, which is not the case with some other types of bankruptcy.
- Chapter 11 bankruptcy
Businesses typically file this type of bankruptcy, but there have been cases of individuals filing for it. In order to qualify, you must be able to prove that you have enough money to repay your creditors within a five-year period.
Chapter 11 bankruptcy is often used by businesses who want to reorganize their finances and keep their businesses running.
- Chapter 12 bankruptcy
This type of bankruptcy is specifically for farmers and fishermen. To qualify, you must prove that you make a regular income from farming or fishing and that your debts are related to those activities.
Chapter 12 bankruptcy allows debtors to restructure their finances to continue farming or fishing.
- Chapter 7 bankruptcy
This is the most common type of bankruptcy, and it’s what most people think of when they hear the word “bankruptcy.” In order to qualify, you must be able to prove that you don’t have enough money to repay your debts.
Chapter seven bankruptcy allows debtors to discharge their debts and start fresh!
- Chapter 15 bankruptcy
This type of bankruptcy is also known as international insolvency. To qualify, you must prove that at least one of your assets is located outside the United States or that debts owed were incurred outside of the United States.
In conclusion, bankruptcy isn’t as scary as it sounds, and different types of bankruptcy may help you.