There are several types of bankruptcy to help you get out of debt. Each bankruptcy has different purposes, requirements, and ramifications. Here is a brief description of the different types of bankruptcy:

Chapter 13

Chapter 13 bankruptcy allows an individual to pay their debts at a budget he can afford. This type of bankruptcy is the wage earners plan.  A chapter 13 plan allows people with a regular income to pay creditors over a three-to-five-year period.  It is a reorganization bankruptcy.

Chapter 7

In a chapter 7 business bankruptcy, the business closes.  The trustee liquidates business assets to settle business debts.  However, individuals use chapter 7 more often to get out of debt.

An individual does not repay debt in a chapter 7 bankruptcy.  Instead, a bankruptcy trustee will sell debtor’s nonexempt assets to settle debts. However, most property is exempt.  This means a person keeps the property that is most important to them like retirement, car, and house.

Chapter 11

Small and large businesses use chapter 11 bankruptcy.  A chapter 11 is known as a reorganization bankruptcy. This bankruptcy allows businesses, and individuals, to reorganize their debts.  Unlike a chapter 13 concludes within five years, a chapter 11 restructures debts for a longer period.  This effectively allows for a proper reorganization.

Chapter 12

Chapter 12 applies to family farmers or fishermen. This form of bankruptcy allows a farmer and fisherman to pay their creditors within three years. However, in some cases, the court may allow a longer period of time. To qualify for chapter 12, farming and fishing must be your primarily means of livelihood.

Chapter 15

Chapter 15 bankruptcy started in the mid-2000s and covers foreign cases. Debtors who are financially struggling in more than one country use a chapter 15. Individuals rarely use it.

Colorado Debt Help will Find the Type of Bankruptcy for You

There is no need to distinguish between the different types of bankruptcy.  Just contact the Broomfield bankruptcy attorney at Colorado Debt Help.  We offer free consultations. We will find the right bankruptcy for you. Sometimes other debt relief options will work instead of bankruptcy.  You might be better off with debt settlement, credit counseling, student loan relief, or a debt management plan.  Regardless, we’ll find the right solution for you.