Debt Help

Under the laws of bankruptcy they have established a number of bankruptcy. The new laws allow the debtors and creditors more room in filing bankruptcy orders, how debts will be cleared and who can file the type of bankruptcy. Not every type of bankruptcy is applicable for everyone and it is crucial that you choose the right type of bankruptcy when filing, so you can benefit the most.

Here are the 3 most common types of bankruptcy:

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common process as it can be filed by individuals or businesses. This type of bankruptcy allows the debts to be wipe clean with little or no repayment.

Under this type of bankruptcy one will see that some of the debtor’s possessions can be exempted and everything not exempted is sold to pay debts.

Under this bankruptcy, a person’s debts are cleared.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy can be filed by businesses and individuals. However, this chapter is more skewed to businesses, though.

This type of bankruptcy is best for those with a lot of assets and a lot of debt. It is a repayment plan that allows a person or business to repay debts in a way they can afford while also keeping all their assets.

Under this chapter, businesses can still remain functional, which is a very good option for many.

Chapter 13 Bankruptcy

Chapter 13 is another repayment plan for individuals only. Under this chapter a person get to keep their possessions while repaying their debts and keeping away from common collection methods.

Any type of bankruptcy protect a person or business from the creditors. The creditors cannot proceed with the collection process once this is filed. Creditors cannot file court charges, send letters to debtors nor to do anything that may harass the debtor.

So which is the best option? The answer is: It depends. Always look at your assets and debts carefully before you decide. Ultimately you should be look at clearing your debts without losing all your current possessions. In order to best do this you need to look at what property you own that is exempt and if you have any property that is not exempt.

As an advice, one should think of Bankruptcy as the last alternative. It should be seen as a way to help you to get back on track. Do not think that you can get away with Chapter 7 because the debtor can keep some of their possessions. New laws have prevented many debtors from filing Chapter 7 when they can afford to pay debts.