When it comes to dealing with debt, bankruptcy is an option that many people consider. In the United States, there are three main types of bankruptcy: Chapter 7, Chapter 13, and Chapter 11.Each of these has its own unique set of rules and regulations that must be followed in order to successfully file for bankruptcy.Chapter 7 bankruptcy is the most common type of bankruptcy in the US. This type of bankruptcy involves selling off many of your assets in order to pay off your creditors. This is a good option for those who have few assets and a lot of debt.
However, it is important to note that not all assets are eligible for sale, as some are protected by bankruptcy exemptions.Chapter 13 bankruptcy is another popular option. This type of bankruptcy allows you to keep your assets while still paying off your debts over a period of time. The court and your lawyer will negotiate a payment plan that typically lasts three to five years. Once you have completed the payment plan, any remaining debt will be forgiven, even if you only paid a portion of what you originally owed.Finally, Chapter 11 bankruptcy is typically used by businesses that want to continue operating while also repaying their creditors through a court-approved reorganization plan.
The debtor has the exclusive right to file a reorganization plan within 120 days after filing for bankruptcy and must provide creditors with a disclosure statement containing all the necessary information for them to evaluate the plan. Once the court approves the plan, the debtor can reduce their debts by repaying part of their obligations and canceling others.The length of time it takes to complete a bankruptcy depends on which chapter is filed. A Chapter 7 bankruptcy can take as little as two months, while a Chapter 13 or 11 can take up to four or five years. After filing for bankruptcy, most people will no longer see their name or city of residence published online or in print.
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