What kind of bankruptcy do I need to file?
The federal government is an excellent source of valuable information when it comes to filing bankruptcy. On the official website for the federal courts, www.USCourts.gov, the federal government provides you with all of the necessary information on bankruptcy basics. The website will provide you with background information on what a bankruptcy is, which chapter may be best for you, and the procedure to successfully accomplish the task. Despite this great source of information, it is still recommended that you consult with an bankruptcy attorney before filing.
The Bankruptcy Code, found in Title 11 of the United States Code, provides for six different varieties of bankruptcies. Some of them are more popular than others, the most common being Chapter 7 and Chapter 13. Chapter 7 is called a “Liquidation” bankruptcy. During this process, the trustee takes possession and control of the debtor’s assets and property. The trustee sells the assets and then pays off the creditors. Some of the property owned by the debtor is exempt from becoming property of the bankruptcy estate.
Chapter 9 is the chapter that allows municipalities, like cities and towns, to reorganize. It does the same as a Chapter 11 only it is reserved for municipalities. Chapter 11 allows business, and some individuals, to stay in business and pay creditors without having to give up the business. A court-approved reorganization plan guarantees that creditors will receive what is owed to them, but the business remains in operation. Several major US companies have recently filed for Chapter 11; General Motors is a prime example.
Chapters 12 and 13 allow debt relief for workers with regular income. Chapter 12 is reserved for farmers and fisherman, whereas chapter 13 is for all other types of employment. These chapters allow an individual to pay off his or her debt over an extended period of time. It allows the debtor to keep some valuable assets and requires that a plan be made to pay off creditors without having to lose his or her entire estate to the bankruptcy trustee. Finally, Chapter 15 provides the procedure for dealing with property that the debtor owns but that is located in a foreign country. These are referred to as “cross-border” cases.
If you’re considering filing for bankruptcy and live in Ohio, call The Law Offices of John T. Nicholson at 1-800-596-1533 for a free consultation today.