These days from all over the world we hear of cases where even large companies have gone bankrupt with the recession taking it toll on businesses and businessmen. It’s surprising therefore that even those who are filing for bankruptcy is sometimes not fully aware of the types of bankruptcy.

types of bankruptcies

Some appear to have taken this whole process rather lightly thinking that it is the easy way out and this is certainly not advisable. You should know that there are various methods to stop yourself from as many would call it ‘going broke’. Bankruptcy should be resorted only in desperate situations. However if you are convinced that you are bankrupt you should learn about the types of bankruptcy to know what would apply in your particular case.

The two common types of bankruptcy are chapter 7 and 13. Chapter 7 bankruptcy relates to a case where it’s fairly obvious. It’s commonly called ‘straight bankruptcy’. If you happen to be in possession of assets of fairly in insignificant value and has a lot of unsecured debt then this applies to you.

types of personal bankruptcy

Among the types of bankruptcy chapter 13 is the next commonly known item. This is quite different from chapter 7. You would have to pay all or a considerable amount of your debt through your income and the time period could be anything between 3 – 5 years. Your secured debt should be less that $750000 and unsecured debt should also be less than $250000.

If your case happen to be categorized as chapter 7 among the types of bankruptcy, then most of your debt will get wiped out. However keep in mind that any debt in the form of federal tax bills or child support will have to be paid. It would be mentioned in your credit history in the case of both chapter 7 and 13 bankruptcy and that is why it’s only advisable to file for bankruptcy if the situation appear to be hopeless.

Chapters 9, 11 and 12 are the some of the other lesser known items in types of bankruptcy. Chapter 9 is only for governmental units and municipalities while chapter 12 is for those who fall under the category ‘family farmers’. Chapter 11 on the other hand pertains to those individuals with fair incomes and assets.

types of bankruptcy

Choosing the correct chapter among the types of bankruptcy is one very important task that would be determined by your circumstances and if your knowledge on the subject of types of bankruptcy is insufficient it’s advisable to seek professional help because the matter in question is one which happens to be very delicate.

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Originally posted 2010-01-03 13:07:39. Republished by Blog Post Promoter

Types Of Bankruptcy is a post from: IRS Tax Problems?

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