{"id":5707,"date":"2022-01-10T03:04:49","date_gmt":"2022-01-10T10:04:49","guid":{"rendered":"https:\/\/debtfreecolorado.com\/?p=5707"},"modified":"2023-01-13T05:25:56","modified_gmt":"2023-01-13T12:25:56","slug":"what-are-the-types-of-bankruptcies-how-do-i-choose-one","status":"publish","type":"post","link":"https:\/\/debtfreecolorado.com\/what-are-the-types-of-bankruptcies-how-do-i-choose-one\/","title":{"rendered":"What Are The Types of Bankruptcies & How Do I Choose One?"},"content":{"rendered":"
<\/span><\/p>\n When someone finds themselves in financial distress, they may consider filing for bankruptcy. But just like choosing a doctor or an in-law, not all forms of bankruptcy are the same and selecting the wrong one can wind up doing more harm than good.\u00a0<\/span><\/p>\n Which type of bankruptcy should you take? The options include Chapter 7, Chapter 11, and Chapter 13. Every case is different, which is why you need a competent <\/span>bankruptcy attorney<\/span><\/a> to help determine which type of bankruptcy fits your circumstances.\u00a0<\/span><\/p>\n So, how do you choose which bankruptcy is right for you? To help you in making an intelligent choice, this blog discusses the different types of bankruptcies along with their pros and cons so you can choose which one best suits your financial situation.<\/span><\/p>\n When a business or an individual cannot meet financial responsibilities or pay to creditors, there is an option to declare bankruptcy.\u00a0 Bankruptcy is a legal process to discharge debt and starts with a bankruptcy petition filed in court. Federal courts have exclusive jurisdiction over bankruptcy cases. As such a bankruptcy case cannot be filed<\/a> in a state court. Bankruptcy laws are in place to protect not just the debtor, but also the creditors. There are several types of bankruptcy.\u00a0<\/span><\/p>\n The common bankruptcy cases are filed under the three main chapters of the Bankruptcy Code, which are Chapter 7, Chapter 11, and Chapter 13. Let us examine each of them in depth.<\/span><\/p>\n Liquidation is the focus of Chapter 7. If you can’t pay your bills, Chapter 7 allows you to sell your possessions to pay your creditors. Individuals and corporations can choose this option, but they must pass the Chapter 7 Means Test to calculate their monthly discretionary income. They can file for Chapter 7 if their disposable income is low enough.<\/span><\/p>\n Unlike Chapter 7, Chapter 13 allows the filing party to keep most of their property and assets. Individuals, not corporations, can file for Chapter 13 bankruptcy, which restructures debts into reasonable repayment plans.<\/span><\/p>\n Chapter 11 bankruptcy is often used to restructure a business or organization. Businesses develop a strategy for continuing business operations while repaying their debt, which both the court and the creditors must approve.<\/span><\/p>\n Certain persons, like real estate investors, who have too much debt to qualify for Chapter 13 and possess many high-value properties and assets, may also elect to file under Chapter 11.<\/span><\/p>\nBankruptcy Defined<\/span><\/h2>\n
Types of Bankruptcy\u00a0<\/span><\/h2>\n
What type of bankruptcy is chapter 7?<\/span><\/h3>\n
Advantages and Disadvantages of Bankruptcy Chapter 7<\/span><\/h3>\n
Advantages of\u00a0 Chapter 7 Bankruptcy\u00a0<\/span><\/h4>\n
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Drawbacks of Chapter 7 Bankruptcy<\/span><\/h4>\n
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Overview of Chapter 13 – Reorganization<\/span><\/h2>\n
Advantages and Disadvantages of Bankruptcy Chapter 13<\/span><\/h3>\n
Advantages of Filing Chapter 13<\/span><\/h4>\n
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Drawbacks of Filing Chapter 13<\/span><\/h4>\n
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Chapter 11 – Business Bankruptcy<\/span><\/h2>\n
Advantages and Disadvantages of Bankruptcy Chapter 11<\/span><\/h3>\n
Advantages of Filing Chapter 11<\/span><\/h4>\n
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Drawbacks of Chapter 11 bankruptcy<\/span><\/h4>\n