Not every person who encounters problems with debt needs to file for bankruptcy. If you are wondering whether this resource could benefit you, it’s best to speak with a lawyer. Trying to decide on your own whether it’s the right next step can be difficult. You may be wondering if you will ever get out of the debt you are currently facing. Thankfully, bankruptcy is a way to slowly but surely dig yourself out of that financial hole.
In order to reap the advantages of filing for bankruptcy, it is crucial that you file for the one most suitable to your situation. There are six kinds of bankruptcy chapters, including Chapter 13, Chapter 7, Chapter 9, Chapter 12, Chapter 11, and Chapter 15.
What if I don’t want to sell my assets? Can I still file for bankruptcy?
Under Chapter 7 bankruptcy, the debtor must pay at least a portion of their debts through liquidating assets. For the person who wants to keep any items currently on loan, he or she may prefer to take a different route by filing for Chapter 13 bankruptcy. Not everyone feels that it’s worth it to eradicate debt by essentially selling off their assets. Under Chapter 13 bankruptcy the debtor doesn’t liquidate their assets, but instead has to commit to a 3-5 year plan for repaying a portion of their debts. Once the repayment plan term is up, the rest of their debts may be discharged.
Is there a bankruptcy option for municipalities?
Yes, there are certain bankruptcy chapters that are strictly for municipalities, such as school districts, cities, counties, and towns. A municipality that files for bankruptcy should use Chapter 9 to obtain protection from creditors while getting the time they need to adjust their debts.
If I am a fisherman or family farmer, what can I do to get rid of debts?
Family farmers and fishermen have unique jobs, so it only makes sense that they have a bankruptcy chapter that applies only to them: Chapter 12. Under this chapter, the debtor establishes a repayment plan so that any outstanding debts to creditors are paid off within 3-5 years. If you are a fisherman or family farmer experiencing a severe financial crisis, then it may be time to consider reaching out to an attorney near you for support.
What if there are debts that involve more than a single country?
Chapter 15 bankruptcy was added to the United States bankruptcy code around fifteen years ago. This chapter provides a route for handling debt cases that involve more than a single country. The intention of this chapter is to encourage cooperation between American bankruptcy courts, foreign courts, and foreign debtors. So, a foreign debtor who has assets in several countries would want to file for Chapter 15.
What does the “automatic stay” mean?
An automatic stay is what happens after someone files for bankruptcy, and it means that creditors are no longer able to reach out to the debtor to ask for payment. Creditors cannot email you, call you on the phone, or send letters to your home.