A business or an individual can declare bankruptcy once they have ascertained that it has become impossible to pay off one's creditors. It can give you a chance to start over from a financial point of view, as most of debts are relieved after bankruptcy as been filed.
Chapter 7, or liquidation bankruptcy, means that your "estate" – i.e., your assets – is sold in order to pay off your creditors. A reorganization bankruptcy can also involve the selling of assets, but more often than not you can retain a majority of your assets while your creditors' needs are assessed.
Reorganization bankruptcies can be filed under the following guidelines:
- Chapter 9 – municipalities
- Chapter 11 – businesses and individuals with many assets
- Chapter 12 – farmers, fisherman
- Chapter 13 – individuals with steady income
- Chapter 15 – international cases
Contact us today to learn more about your options under the current bankruptcy laws. We're here to help.