In the shortest sense, when a business or individual declares bankruptcy, they are, as per Investopedia, declaring an inability to pay outstanding debts. Typically, this is a legal proceeding that requires the attention of a bankruptcy lawyer in Jacksonville, such as Robert Peters Attorney.
While declaring bankruptcy is certainly the swiftest way to remove your debt obligations, it isn’t straightforward or painless.
Chapter 7 Bankruptcy
As per the US Courts website, a Chapter 7 means your bankruptcy trustee may take and sell your assets, including property and more. There are certain properties exempt from liquidation, and not all of your property may be sold.
Chapter 7 eligibility depends upon your employment status. If you have enough of a wage to file a Chapter 13, you will be advised to do so instead.
Chapter 11 Bankruptcy
If you either own substantial assets that you would not want to liquidate, and have too much debt for a Chapter 13, a Chapter 11 is a more expensive option of reorganization, and typically used by struggling businesses to get their matters in order.
Chapter 12 Bankruptcy
A special form of reorganization bankruptcy, being eligible for a Chapter 12 requires that 80 percent of your debt comes from the operation of a livestock/family farm or a fishery. It accommodates larger debts than a Chapter 13, without forcing you to file for a Chapter 11.
Chapter 13 Bankruptcy
This is the most common form of reorganization bankruptcy, and it involves making reduced monthly payments over a certain period of time to pay back a smaller amount of your original debt. The one requirement to file for a Chapter 13 is a secure job. Your minimum repayment amount will be calculated based on what you can pay back on your living wage.
If you fear that you cannot pay back your debts, whether you’re doing so as a company or an individual, it’s best to call an attorney to further discuss your financial future.
