At present, there are different types of bankruptcy to choose from. Each one has its pros and cons. They all should be considered before you file your petition. Take time to determine the most suitable option for your specific situation. Don’t forget that every chapter contains its unique set of rules and laws. You should contact legal professionals to get their expert guidance. Make sure that you will work with the best bankruptcy lawyer in Tucson.
- Chapter 7. It is one of the most common bankruptcy types chosen by many individuals with financial difficulties. At times, this debt solution is used by business owners. Keep in mind that this option is the most severe one. That’s because most of your valuable assets will be liquidation to pay off the debts that you owe. They will be sold by your trustee and the money obtained will be distributed to your creditors. The good news is that there are certain assets that are exempt, so that they can’t be liquidated. As soon as you complete this bankruptcy process, you won’t be able to do the same thing for 6 years.
- Chapter 13. This debt solution is designed for individual debtors with a steady flow of income. This doesn’t mean that the owners of small businesses can’t benefit from it. If you choose this type, your personal debts will be reorganized. You will have to pay them off within a 5-year period. The best part is that you are allowed to keep your property, such as real estate and cars. You need to create an effective repayment plan and stick to its rules and meet deadlines.
- Chapter 11. It is designed for business owners, but some individuals can take advantage of this bankruptcy type too. This solution is quite similar to Chapter 13, but it has more requirements stated by laws. If you need an effective repayment plan to get rid of your debts, you should choose between Chapter 13 and Chapter 11 instead of filing for Chapter 7 bankruptcy.
- Chapter 12. It is a voluntary bankruptcy option that can be used by fishermen and farmers. They need to have a regular income to benefit from it. There are certain exceptions for them if their income is seasonal. This is when they have to create a plan to get rid of their debts within a certain time period. This process is less expensive and daunting.