Posted On: Tuesday, November 22nd, 2011 at 4:49 am
There are many different forms of bankruptcy that a party can file depending on whether they are an individual or a business entity. Chapter 11 is for businesses, 12 is for farmers, and 7 and 13 are for individuals.
A chapter 11 bankruptcy is most commonly used for businesses but individuals may in some cases file it as well. With this type the debtor continues with its business but has up to 120 days to come up with a new plan for coming up with the money it owes to creditors. Chapter 12 is the same except it is for farmers.
A chapter 13 Bankruptcy allows individuals to keep their assets while working out a plan for repaying debts. Chapter 7 is the most commonly referred to by individuals. In this form, the debtor sells off all assets in order to pay off the debts owed, and any remaining is wiped clean.
Categories: Legal