Struggling with debts? Thinking of filing for bankruptcy? You’ll be surprised to know that there is more to bankruptcy than most people are aware of. Lawyers of Los Angeles based bankruptcy law firm Recovery Law Group inform that bankruptcy code has 6 chapters, four for individual debtors residing in the U.S. and the remaining two for non-residents who wish to file for international bankruptcy case or for municipalities which need a reorganization of debts.
Chapter 7 bankruptcy is one of the most common bankruptcy chapters. In this case, you can keep exempted property and liquidation of non-exempt property takes place to pay your creditors on a pro-rata basis. Any unsecured debts which remain are discharged. The entire process takes place in 4-5 months. However, this option is available for people who have a monthly income below the state median. People with income more than the state median need to take the means test to qualify for this bankruptcy chapter.
Chapter 13 is the 2nd most common bankruptcy chapter. In this case reorganization of debts takes place. Debts are organized on a priority basis and disposable income is used to come up with a repayment plan through which all creditors including unsecured ones are paid over a period of 3-5 years time. Any unsecured debt which survives after this time is discharged. You can catch up on past arrearage in this bankruptcy chapter. This chapter of bankruptcy is opted by debtors who either make more money or wish to keep non-exempt property.
Apart from the above-mentioned chapters, there is Chapter 12 which is a bankruptcy chapter available for farmers and fishermen. The basic principle is like Chapter 13 bankruptcy; however, the debt ceiling is relatively higher (in millions). Chapter 11 also offers reorganization of debt but there is no debt ceiling or limit on income, but there is a catch. Your creditors need to vote on the proposed repayment plan; depending on the number of the creditors and what is owed to them individually. This bankruptcy chapter is one of the most expensive chapters to be filed and is generally used by businessmen and celebrities.
If you are concerned about which bankruptcy would be ideal for you, you should contact experienced bankruptcy lawyers at 888-297-6023 and discuss the possibilities.