WHAT KINDS OF BANKRUPTCY CASES ARE THERE?
There are three types of bankruptcy cases that a consumer would be interested in:
- Chapter 7 is know as “straight” bankruptcy or “liquidation.” Debtors are provided certain cash limits on assets called “exemptions,” . If a client is over these limits, the Debtor often has an opportunity to purchase back this property for the cash value over the exemption amount, from the Trustee.
- Chapter 11, known as “reorganization,” is used by businesses and a few individual debtors whose debts are very high and they are unable to file a Chapter 13 or 7.
- Chapter 13 requires a debtor to Chapter 13 Plan to repay a portion of certain debt, from what is lets in their monthly household budget, after expenses. This is the chapter that allows you to strip a mortgage from your home or cram a car to it’s value, for repayment.
Most people filing bankruptcy will want to file under Chapter 7. Either type of case may be filed individually or by a married couple filing jointly.
