As your premier bankruptcy attorneys in Utah, we at Utah Bankruptcy have seen just about every situation there is to see in this industry. We have significant experience dealing with each of the four bankruptcy filings, and can help you with all your questions in any of these areas.
Many people don’t know much about any of the different types of filings under Title 11 of US Federal Code, and how they might benefit them. Let’s look at each of the four types.
Chapter 7 bankruptcy is considered the “liquidation” form. This is a true “wipe the slate clean” type of thing – a debtor filing for Chapter 7 is starting over entirely. A trustee is appointed to assist with the sale of assets – this doesn’t necessarily have to be all of a given debtor’s assets, but it’s often most of them.
Once these have been liquidated, the trustee pays creditors a percentage of the proceeds. Certain other debts are forgiven, or discharged – debts which cannot be discharged generally include student loans, alimony or child support taxes. If you’ve filed for Chapter 7 bankruptcy, you won’t be eligible to file again for another seven years.
Chapter 11 bankruptcy is considered the “reorganization” format. This format again involves a trustee, but this time includes a repayment plan which is submitted to a court for approval – the court can then approve, alter or suggest a new plan. These plans can last anywhere from three to five years. Debtors do not have to liquidate assets in this format, and they’re often only repaying 30 to 50 cents on the dollar from what they actually owe. Both individuals and corporations can file for Chapter 11 bankruptcy.
Chapter 12 bankruptcy is relatively similar to Chapter 11, except that it’s specifically designed only for family farmers. It’s not meant for larger companies or corporations.
Chapter 13 is also similar to the two types above, but instead of being for family farmers, it’s for all other individuals – and again, not for corporations or larger companies. There are limits set on the amount of money which can be owed by the debtor under Chapters 12 and 13 bankruptcy.
Want to learn more? The experts at Utah Bankruptcy are standing by to assist you today.