The most common types of bankruptcy available for individuals and sole proprietorship businesses include:
1) Chapter 7
This is also known as straight bankruptcy. It will help you take away most of your unsecured debts including medical bills and credit card bills. The deficiency debt following the surrender of any collateral such as a house or car will also be wiped out through this chapter. However, it will do so by selling off your assets. If you want to keep any of your assets you have to make sure to exempt them beforehand. There are several tests that check if you qualify for chapter 7 keeping in accordance with your income and expenses.
2) Chapter 13
Chapter 13 is also known as the structuralization of debts for an individual. Even non-dischargeable debts such as recent income taxes can be taken care of by this chapter. It will also allow you to catch up on house payments, restructure vehicle payments, and so on. The process of restructuration is done by payments over a period of 3 to 5 years.
Both these chapters are in handy and beneficial to an individual. However consulting with an attorney before filing for a particular chapter is advisable, as an attorney will be able to guide you better as to which chapter is the most suitable for you. You can also contact Recovery Law Group from Los Angeles & Dallas, TX for the same. Contact – (888-297-6203).