Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors.
There are six types of bankruptcy yet three most commonly used by the preponderance of the public.
Chapter 7: Chapter 7 is for
unsecured debt (Credit Cards, hospital bills, past due utility bills
etc…). An online credit counseling course must first be completed by
the debtor. This is the most simplistic form of Bankruptcy
Chapter 11: Is used primarily by
business debtors but also by individuals with over $2M in Assets. It
should be seen as more of a financial reorganization which typically
allows debtors to continue to function while they follow debt repayment
plan.
Chapter 13: Also termed “wage
earners bankruptcy”. Chapter 13 is most often used by those trying to
protect their home from foreclosure. The goal is to create payment plan
for those with a regular source of income and to develop a plan to
repay all or part of their debts.
Debt settlement, also known as debt arbitration, debt negotiation or credit settlement,
is an approach to debt reduction in which the debtor and creditor agree
on a reduced balance that will be regarded as payment in full.
Our staff of experienced Bankruptcy and Debt Settlement attorneys
will help you clearly understand if one of these options is the right
option for you. Call us for a free, no obligation consultation.
