If you have questions about bankruptcy basics, our team can provide answers and point you to additional resources.
To most people, the prospect of bankruptcy is intimidating or even frightening. While our team at Tarantino Law, PLLC understands that facing bankruptcy is never easy, we also want to help shed some light on the process to take fear out of the process. In this article, we’ll go over some bankruptcy basics to help you know what to expect.
Starting with the most fundamental of bankruptcy basics, bankruptcy is a process that can release you from personal liability for some of your debts, meaning that you will no longer be legally required to repay the debts in question. There are six types of bankruptcy, each with its own requirements and results. They are:
- Chapter 7 — In this type of bankruptcy, a trustee takes over the assets of the debtor’s estate, sells them for cash, and distributes them to the various creditors.
- Chapter 13 — If you have a regular source of income, you can file for this form of bankruptcy, which will allow you to keep a valuable asset (like your house) and make a plan to pay back your creditors over time (typically 3-5 years).
- Chapter 11 — Chapter 11 bankruptcy is designed for businesses and allows them to stay in operation while paying creditors back through a court-approved plan of reorganization.
- Chapter 12 — This type of bankruptcy is similar to chapter 13, but it is designed for family farmers or fishers with regular income. It allows you to keep operating your farm or vessel while paying back your debts over a period of 3-5 years.
- Chapter 9 — This process is similar to chapter 11, but it applies to municipalities such as cities, counties, school districts, etc., instead of businesses.
- Chapter 15 — Chapter 15 bankruptcy is a mechanism designed to allow the courts to deal with cases in which the debtor is subject to the laws of one or more foreign countries in addition to the US.
Our team is proud to serve the Mooresville, North Carolina community, and we want to help you get back on your feet. The information we have provided above is just a summary–to learn more, you can check out the Bankruptcy Basics document prepared by the Administrative Office of the US Courts. We also encourage you to call our team to get more specific advice for your unique circumstances.