So which bankruptcy is best? There really isn’t a right or wrong type of bankruptcy–it all just depends on your circumstances and what would work best for your specific situation. To give you a general idea of which bankruptcy is best you need to understand the different kinds of bankruptcy, here’s a quick summary of each type:
-Individuals may file Chapter 7 or Chapter 13 bankruptcy, depending on the specifics of their situation. See more below.
-Municipalities—cities, towns, villages, taxing districts, municipal utilities, and school districts may file under Chapter 9 to reorganize.
-Businesses may file bankruptcy under Chapter 7 to liquidate or Chapter 11 to reorganize.
–Chapter 12 bankruptcy provides debt relief to family farmers and fishermen.
-Bankruptcy filings that involve parties from more than one country are filed under Chapter 15. See US BK Code
Since it’s most likely that you’re filing as an individual (or jointly, with your spouse), you’ll want to consider either Chapter 7 or Chapter 13; both may be applicable to your situation, but you may feel that one is more preferable than the other.
Chapter 7 bankruptcy summary:
“A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.” See US Courts
Chapter 13 bankruptcy summary:
“A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” (1) If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. § 1322(d). During this time the law forbids creditors from starting or continuing collection efforts.” See US Courts.
Again, determining which bankruptcy is best really depends on your specific circumstances. Working with an experienced attorney will belp you make the right choice for your situation. That’s why in Utah we offer individuals free, in-office consultations, and since we know you have a busy schedule, the consultation will only take about 30 minutes of your time. So drop by our office, or call 801-221-9911 to set an appointment, and let us help you determine which type of bankruptcy is best for you.