The decision to file bankruptcy is becoming more common with individuals who are facing financially tough times. The failing economy has brought many individuals to a place they never thought they would be. The bankruptcy process is a proceeding in the federal court of law in that the debtor’s assets become liquidated and the debtor is granted relief from the liability of debt.
There are three basic types of bankruptcy that can be filed by a Bankruptcy attorney in Richmond VA. These types are:
Chapter 13-This type of bankruptcy can be filed for individuals that want to retain ownership of their assets. This is a bankruptcy that involves a repayment plan. This repayment plan is generally a three to five year plan that involves the debtor making routine payments on the amount owed. A portion of the debit can be discharged depending on the debtor’s income. There are limits set on the amount of debt involved in this type of bankruptcy.
Chapter 7-This type of bankruptcy is commonly filed by individuals. This is what is considered to be a type of liquidation bankruptcy. The bankruptcy trustee will take control the debtor’s assets that are not exempt and will proceed to sell them off to pay the debts owed to creditors. Whatever amount of the debt cannot be settled will be discharged and which results in the debtor being relieved of continued liability of those debts. This type of bankruptcy is generally avoided by business owners because under this chapter, they cannot continue business operations.
Chapter 11-This is a more complex type of bankruptcy. This type of bankruptcy is commonly used by troubled businesses. When under this type of bankruptcy and debtor can continue their business operations. They can also maintain the ownership of assets. They also try to work out what is called a “reorganization payment plan” which is a plan to pay off their creditors.
Bankruptcy laws can be confusing at times. The decision to file is generally not an instant decision by the debtor. The best way to protect yourself and your assets when considering bankruptcy is to consult with a Bankruptcy attorney in Richmond VA. They can help guide you in the right direction and help you decide what type of bankruptcy is best for you.