There are three basic types of bankruptcy cases: A Chapter 7 liquidation, a Chapter 13 “wage earner’s bankruptcy,” and a Chapter 11 reorganization. These basic types of bankruptcy cases are named after their respective chapters in the Bankruptcy Code and are appropriate to different situations.
A Chapter 7 bankruptcy case may be used to eliminate or “discharge” most debts of an individual or to liquidate a business.
A Chapter 13 bankruptcy case may be used by an individual or by a sole proprietorship business, that has a regular income, in order to pay debt over a period of time, and is often used by debtors who seek to save their house or other real property from foreclosure or individuals with other problematic debt who do not choose Chapter 7 because of equity in their assets.
A Chapter 11 reorganization case may be used by a business or an individual to reorganize its financial affairs while continuing to own, manage, and operate its property.
The mechanics, requirements, and rights involved in these different types of bankruptcy cases vary drastically and how they may apply to a particular case can also vary greatly depending on the particular circumstances and parties involved in a case.
Please call us at (631) 271-3737, or e-mail us at firstname.lastname@example.org for a free consultation to discuss such legal options in greater detail.