Types of Bankruptcy
Straight bankruptcy designed to give an individual a quick fresh start. The vast majority of individuals that file Chapter 7 keep all of their property, including homes and vehicles. Generally, no payments are made to the bankruptcy court or to creditors.
The court may order creditors to accept, over time, a monthly payment of whatever a person can afford to pay towards his bills. One monthly payment is made to a bankruptcy trustee who distributes money to your creditors. Each case is different, but, there is generally no requirement that this payment is enough to pay all or even a significant percentage of your old bills. Instead, many people have a total monthly payment of as little as $100 per month. The monthly payment is most often made for 3 years and cannot be any longer than 5 years. Once the payments are completed, the unpaid balance of most debts is discharged – even if the bill hasn’t been paid. In some situations, Chapter 13 can provide benefits that are not available in a Chapter 7. For example, it may be possible to use this chapter: to catch-up a mortgage that is in foreclosure, to eliminate a second or third mortgage, or to restructure a vehicle loan.
A complex form of bankruptcy that is most frequently used by businesses.
A rare form of bankruptcy that is only available to farmers and fisherman.