Various Bankruptcy Procedures For Consumers

There are several different types of bankruptcy procedures. They are generally referred to by their Chapter number in the Bankruptcy Code.

Chapter 7 is the type of bankruptcy most frequently used by individuals. Under this Chapter, a court-appointed trustee collects any assets the bankruptcy petitioner may have, and makes distributions to creditors. The petitioner can keep assets that are exempt either under Federal law or the law of his or her home state.

Chapter 13 is another frequently used type of bankruptcy. It is designed for an individual debtor who has a regular income and stable job. Under this procedure, the petitioner pays debts off over a three-to-five year period and is allowed to keep his or her property. A Chapter 13 can be filed at any time.

Individuals may also use Chapter 11 reorganizations, but this form is generally targeted to businesses. Farmers can use Chapter 12. Chapter 12 allows farmers with real estate debts to pay off the debts from the profits generated by future crops.

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