Bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by court order, often initiated by the client.
Chapter 7 allows you to permanently discharge your debts, while Chapter 13 consolidates your debts into a manageable payment.
Chapter 7
When you file for Chapter 7 bankruptcy with the help of a bankruptcy attorney, you can discharge unsecured debts such as credit cards and medical bills. You can also liquidate some assets and use the money to pay off debts that you otherwise would not. A competent bankruptcy attorney can help you understand how to keep your home and vehicles throughout this process.
Chapter 13
When you file for Chapter 13 bankruptcy, your bankruptcy attorney will help you create a repayment plan that includes most or all your debts. Instead of making multiple payments to multiple creditors, you can make one manageable payment each month until you clear your debts. Whichever chapter you choose, you are granted an automatic stay, which means that creditors and collectors can no longer contact you and you do not need to worry about repossession or foreclosure.
Chapter 11
When you file for Chapter 11 bankruptcy, it is generally the most intense of all bankruptcy cases. In addition, it is the most expensive form of a bankruptcy proceeding. For these reasons, a company must weigh its options before considering Chapter 11 reorganization. A careful analysis and exploration of all other possible alternatives are recommended before a final decision is made.
