In my work as a Dayton bankruptcy lawyer, it is my job to know all the nuances of the various forms of bankruptcy and to help my clients select the right bankruptcy options.
There’s a good chance that you are reading this blog post because you want to know more about bankruptcy, so I thought it would be helpful if I shared a general summary of the three most common types of bankruptcy. Of course, you would want to retain an attorney on your own to assess your own unique personal situation, but these descriptions are a good start to the process of informing yourself.
Chapter 7 bankruptcy is the most commonly filed form of bankruptcy in the U.S. It offers immediate and complete relief of oppressive and crippling debt. Typically, it is used by people who have gotten in over their heads financially, or have been visited by some kind of great personal misfortune (like a medical event that generated exorbitant medical bills). Chapter 7 is a kind of liquidation bankruptcy, which means that the process takes almost all of a filer’s assets and uses the proceeds to satisfy what outstanding debt is possible. That sounds intimidating, but with the guidance of an experienced bankruptcy attorney, it does not necessarily have to be a frightening process.
Chapter 13 bankruptcy is sometimes referred to as “wage-earner’s bankruptcy.” It is considered a form of debt consolidation. In Chapter 13, a court helps reorganize a filer’s debts. A filer is held to a spending and repayment plan that is often quite strict. Some people consider this a less severe form of bankruptcy because it can be compared to asking a court to referee on a debtor’s behalf, rather than just asking the court to discharge all unsecured debt.
Chapter 11 bankruptcy is usually used by businesses, often smaller outfits and sole proprietors. It can either be used for liquidation or reorganization, and can last anywhere from a few months to several years.
As we said earlier, these are meant to be very general looks at the types of bankruptcy that are available. For more detailed information, we invite you to Contact Us.