Different Types of Bankruptcies

Tampa Bay Bankruptcy and Debt Relief Attorney

A St. Petersburg bankruptcy lawyer can help you choose the bankruptcy chapter that best addresses your situation.

Bankruptcy is a legal recognition that an individual or a business cannot pay its debts. There are many sections, or "Chapters," of the bankruptcy code. These different Chapters try to deal with the different situation's debtors find themselves in. The different types of bankruptcies used in the Chapters of the bankruptcy code are Chapters 7, 11, and 13. Debtors, assisted by the courts, must decide which Chapter best addresses their situation. If you are in Pinellas County or Tampa Bay, consult a St. Petersburg bankruptcy lawyer can help you choose the chapter that best addresses your situation. To learn more about the different types of bankruptcies, check out this easy guide from the U.S. Courts.

Different Types of Bankruptcies

Chapter 7 Bankruptcy

Chapter 7 bankruptcy applies to filing personal bankruptcy as well as business bankruptcy Chapter 7. In 1999, 69% of all bankruptcy cases were filed under Chapter 7. Under Chapter 7, all of the individual's assets are "liquidated"--sold off--by the courts to pay creditors. To determine what assets the debtor owns, a complete list must be supplied to the federal bankruptcy court. In addition, a full accounting of all liabilities must be presented to the court. Once the assets have been liquidated, creditors start getting paid. First in line is the government! Payment of taxes gets the highest priority. Some financial obligations must be paid even after a Chapter 7 bankruptcy is finalized, including alimony, child support and student loans. Naturally, few creditors will ever see their money because of the financial condition of the debtor's personal or businesses finances. Declaring Bankruptcy Chapter 7 is a complex process. If you are contemplating maneuvering through the steps of filing bankruptcy, you will need the services of a chapter 7 bankruptcy attorney. A St. Petersburg bankruptcy lawyer is your best bet.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy applies to businesses. By filing under Chapter 11, a business is allowed time to conduct business debt restructuring or commercial debt restructuring and is shielded from persistent creditors. The hope is that through reorganization, the firm can return to profitability and thereby repay some of its debts. While the firm continues with its day-to-day operations, the bankruptcy court reviews the firm's financial condition, and hears from the firm's creditors--who may ask the court to investigate the firm for mismanagement or other wrongdoing. The Chapter 11 court proceedings may take years to complete and, even if the firm's reorganization efforts are successful, there is a distinct possibility that the firm will pay its creditors only a fraction of what is owed to them.

If you are considering Chapter 11 bankruptcy or Subchapter V bankruptcy for your business, you will need the services of a commercial bankruptcy attorney who is also knowledgeable of LLC bankruptcy options. A St. Petersburg bankruptcy lawyer can give you bankruptcy advise about your contemplated business bankruptcy filing and help you take advantage of the benefits of Chapter 11 Bankruptcy and Subchapter V bankruptcy, under Chapter 11.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy applies to individuals who are not in the dire financial situation that individuals filing under Chapter 7 find themselves in. In 1999, 28% of bankruptcy cases were filed under Chapter 13. Under Chapter 13, debtors file Schedules with the bankruptcy court as well as a Chapter 13 plan. Chapter 13 bankruptcy allows a debtor three to five years to catch up on secured debts such as a mortgage or car loan. In addition, a bankruptcy trustee will be appointed to oversee the case for the next three to five years. The debtor is obligated to pay his disposable income to the Trustee in order to pay unsecured creditors. The benefit to the debtor is that most, if not all, of his assets are protected under Chapter 13 bankruptcy automatic stay.

Whichever bankruptcy works best for your situation it may be helpful to speak with a qualified bankruptcy attorney at the Coleman Law Group to find out your options. Take control of your debt, instead of letting it control you. We are an affordable bankruptcy attorney that offers compassionate and experienced bankruptcy advice. All the paperwork can be handled online, and we can file bankruptcy online on your behalf. Call us at 727.214.0400 for a free bankruptcy consultation.