What’s with all these chapters anyway?
According to the U.S. Department of Justice there are four kinds of personal bankruptcy and you can choose the kind of bankruptcy that best meets your needs (provided you meet certain qualifications):
Chapter 7 “ A trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the State where you live and applicable federal laws.
Chapter 13 “ You can usually keep your property, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The court must approve your repayment plan and your budget. A trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of your repayment plan.
Chapter 12 “ Like chapter 13, but it is only for family farmers and family fishermen.
Chapter 11 “ This is used mostly by businesses. In chapter 11, you may continue to operate your business, but your creditors and the court must approve a plan to repay your debts. There is no trustee unless the judge decides that one is necessary; if a trustee is appointed, the trustee takes control of your business and property.
Bottom line: I’m a Certified Foreclosure Specialist and a REALTOR and NOT a bankuptcy lawyer in Prescott. Read up on the basics first, so you’re not paying $200 an hour for an education on the process, and then consult with an attorney who specializes in personal bankruptcy. A bankruptcy lawyer will help you determine which option is best for you.
More information about bankruptcy:
DOJ Bankruptcy Information Sheet as a PDF
For more information go the DOJ US Trustee website
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