The Most Common Types of Bankruptcy

People file for bankruptcy for a multitude of reasons. After all, it is no great secret that many people today face financial troubles whether as individuals or as a business entirely. Many think that filing for bankruptcy is synonymous with totally giving up the ghost when, really, sometimes it is filing for bankruptcy that could save a person or business from absolute despondency.

There are several different kinds of bankruptcy cases. This is to cater to the various situations that a person or given party could be dealing with.

Filing for chapter 7 bankruptcy, for example, allows for you to liquidate some of your assets. However, this kind of bankruptcy requires that the individual pass the means test and they must be below the median level in order to qualify for this bankruptcy. By far and large, it is the chapter 7 that is the most popular among private citizens. Chapter 11 is more common among businesses as it is allows for them to restructure their debt as well as still retain some of their assets, thereby allowing for them to still continue their business, while coming up with a payment plan for the debts that would be suitable for all parties involved.

There are several other different kinds of bankruptcies but they are commonly specified to the kind of profession or business that you have. Chapter 12 bankruptcy, for example, allows for farmers or even fishermen to reorganize their debts.

The Dallas bankruptcy lawyers of Gagnon Peacock and Vereeke say on their website that it is a good idea for you to consult with a legal professional before deciding to file for bankruptcy. Due to the fact that there are several different kinds of bankruptcy, filing for the right kind of case would save you a lot of time and effort, and that can only be done after following the advice of someone more experienced with the given situation.

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