The Federal Bankruptcy Code provides four types of bankruptcy chapters for filing.

Chapter 7 – Provides for your debts to liquidated
Chapter 11 – Provides for a business to reorganize their debts
Chapter 12 – Provides for Family Farmers with Regular Income
Chapter 13 – Provides for Individuals to reorganize their debts

To file any of these bankruptcy chapters you must first look at your personal of business situation. The most commonly used bankruptcy filing is Chapter 7 bankruptcy as this eliminates the majority of the debts.

The reason why chapter 7 is so popular is because the debtor’s assets are sold to provide access to instant cash for the bankruptcy trustee to pay as much of the debts to the creditors.

Chapter 11 is commonly used by corporate businesses, however in some instances can be used by individuals. This involves the business owner keep control the running of the business but must sell it assets to pays it’s creditors. Once the business has sold their assets it must then reorganize the business to start a fresh. All rights and interest that the owner had with the original business now cease to exist and must form new ones.

Chapter 12 is exclusively for family farmers who are still running their business but are unable to meet their debts with the annual income that is coming in to the business. Family farmers are affectively requesting relief from the courts on the enormous debts that the business normally has.

Chapter 13 provides for individuals that do not meet the means test of Chapter 7, but who are still struggling financially. The individual is normally still working or has some sort of income, which they can use to repay some of their debt. A repayment plan will be drawn up to show how much they will pay on a monthly basis and for how long.

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Chapter 7 bankruptcy is the easiest out of all the types of bankruptcy to file. It is becoming increasingly popular for people to carry out their own bankruptcy filings by purchasing do-it-yourself bankruptcy kits.

What are the different types of bankruptcy?

There are a number of bankruptcy chapters that can be used for different types of applicants.

Chapter 7 Bankruptcy – for individuals and/or businesses to liquidate all eligible debts
Chapter 9 Bankruptcy – for a municipality bankruptcy
Chapter 11 Bankruptcy – for a business or in some circumstances for an individual who wants to reorganize debts
Chapter 12 Bankruptcy – for family farmers and family fisherman
Chapter 13 Bankruptcy – for people who are unable to use chapter 7 and who must reorganize their debt with a repayment plan
Chapter 15 Bankruptcy – for international cases

It can be as easy as filing legal bankruptcy online by using affordable legal document providers. They will arrange to not only complete the forms for you but they will also submit your bankruptcy forms in to the relevant bankruptcy courts.

You will need to gather a number of documents before you can file for bankruptcy the first being your certificate showing you have carried credit counseling in the last 180 days prior to the date of bankruptcy filing. You also need to show your federal tax return as it is not always to possible to get rid of this debt. Lastly your wage slips for the last 60days if you have been working.

As I have said before you are able to file without attorney bankruptcy and this can be done by even using downloadable forms. However you can use bankruptcy attorney experience with out the attorney prices. Click here to find out more Legal Documents @ Lawyer-Free Prices

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What is Chapter Seven bankruptcy? This is also known as the straight bankruptcy or liquidation. This is used when you no longer have the capacity to settle your debts from the income you have.

The is a whole variety of reasons why you are unable to the pay your debts the most common being that you have lost your employment, the business is not doing so well, you have recently had to pay high medical bills etc.

Individuals as well as businesses can use chapter 7 bankruptcy and the reason they choose the liquidation route is because they want a fresh financial start.

You can only qualify for chapter 7 bankruptcy if you fulfill the means test. This is based on the earnings of the family in that particular state. If the family has an average income for a family that size in the state that it resides in, they are likely to achieve the criteria for chapter seven bankruptcy. If they are unable to fulfill this test that there are a few other means test that can be applied before they can be rejected for chapter 7 bankruptcy.

The other criteria’s for liquidation is that you must not have been granted bankruptcy in the last six years, if you have been rejected for bankruptcy you cannot file again for another six months and you must have your business or live within the United States.

The process involved with this bankruptcy is generally very complex, however Chapter seven seems to be the easiest out of all the bankruptcy procedures.

The court will appoint a bankruptcy trustee to oversee the whole bankruptcy procedure, in which the trustee will gather information of all your non-exempt assets and will liquidate those assets to pay your creditors. However, most of the people or businesses that file under Chapter 7, do not have any many assets to pay their creditors, especially unsecured creditors.

Once the bankruptcy trustee has all it’s information they will arrange to conduct a meeting with your creditors, this is also called a 341 meeting, in which they will disclose how much they are able to pay the creditors to enable them to discharge their debts. As it is unlikely that you will have assets to cover all your debts, the creditors will have to agree a percentage or an apportionment of the debt in full and final settlement of your account.

One of the conditions of filing for chapter seven bankruptcy and for a chapter 13 bankruptcy for that matter, you must also attend credit counseling from an approved credit counseling agency, which is approved by the Government. This must be done at least 6 months prior to filing your bankruptcy documents in to court.

Once you have been granted your chapter seven bankruptcy, you have then been given your fresh financial start and it is then your turn to put in action your life after bankruptcy. By re-establishing credit lines, reaffirming any loans you may still have and commence employment if possible.

You must be aware that after you have been granted a Chapter 7 bankruptcy, this will be listed for 10 years and will effect your credit rating that is why it is so important to re-establish them as soon as possible and it is possible. There is no reason why you cannot get an excellent credit score within 4-6 years.

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