Types of Bankruptcy

The Different Types of Bankruptcy

One very important thing to understand whether you’re a home owner or business owner, is the different types of bankruptcy that you can file under the Title 11 of the United States Bankruptcy Code. The terms might sound like legalese at first but you need to know the language if you want to take advantage of the power of these laws.

There are six primary chapters of bankruptcy proceedings that have provisions under the United States Bankruptcy Code but we need only mention three of these: Chapter 7, Chapter 11 and Chapter 13.

Chapter 7 Bankruptcy, Entitled Liquidation

This bankruptcy procedure considers systematic, court-supervised proceedings where a trustee gains control over the property of the debtor, and by order of the court, sold in exchange for cash. The proceeds will then be distributed by the trustee to the creditors. There will be properties that can and will be retained by the debtor with a mind to the rights of secured individuals if any. There are situations where there are minimal to no assets, which automatically means that no liquidation of a bankrupt individual’s properties and assets can occur and this case will be tagged as a ‘no-asset case’. A creditor who needs to collect unsecured payment may get the money owed from the debtor’s estate provided that the procedure is an asset case and there is substantiation of claim that can be presented to the court. If the entity that filed for bankruptcy is a person and not a collective business organization, discharge may be granted that releases the said individual from liabilities for certain dischargeable money owed to certain creditors.

Changes made to Chapter 7 of the Bankruptcy Code put into place Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This serves as a gauge to check the eligibility of an individual debtor for relief or discharge from debts under Chapter 7.

Chapter 11 Bankruptcy, Entitled Reorganization

This type of case is utilized by business enterprises that want to maintain a continued status of business operation and concurrently pay back creditors through an approved program of reorganization mandated by the court. A debtor under this bankruptcy case usually maintains the right to create a plan of reorganization for the initial 120 days after the case has been filed. All the facts and details pertaining to the planned reorganization of the business will be disclosed to the creditors for evaluation, however, all powers of approval or disapproval remains with the court. The said reorganization may end unnecessary contracts and services that over taxes the said business. Resizing of commercial activity to minimize costs is also a usual option and a general consolidation of all business functions is aimed at creating profit and decreasing debt.

Chapter 13 Bankruptcy, Entitled Adjustment of Debts of an Individual With Regular Income

This bankruptcy scheme is for the individual debtor who has a steady means of income and it allows the debtor to hold important assets such as a house or a car. Similar to Chapter 12, the debtor can propose a plan for repayment to the creditors concerned with similar time constraints. Chapter 13 is said to be more preferable than Chapter 7 since the debtor maintains possession of the assets of his estate and as with chapter 12, a court-appointed trustee ensures that payments to creditors is maintained. A Chapter 13 debtor has to first complete the required payments before discharge is received from the court. While the plan is active, the debtor is immune from lawsuits, garnishments and other similar motions that involve collection of the said debt.


e-Mail Vanessa Childs Map to Office

I am Bankruptcy Attorney Vanessa Childs. Every day I meet good people struggling financially. I have dedicated my law practice to helping people find solutions to tough situations. It is my mission to help clients facing a debt crisis to get control of their finances and start on a path to a financially secure future. It is a very rewarding experience to meet with a client who is facing the loss of their car, home, or their family’s life style as they currently know it because it all about to fall apart; to hear about the stress, anxiety, the loss of sleep, yet we are able to make a legal plan to immediately and drastically improve their situation.

When you visit me, I will likely be able to reduce your anxiety so that you will walk out of my office with real hope and you’ll be looking forward to a tangible and fresh start. It is my experience that anyone is but one job loss or one unexpected medical emergency away from the need for a bankruptcy attorney. Being in debt doesn’t make you a bad person. Good people can fall victim to bad circumstances. I am here to help.

Knowledge is Power and we will share our knowledge with you when you have us partner with you in stopping further damage and harassment from mortgage lenders, banks, and other creditors while getting your financial life back in order.

Call our office to schedule an appointment with attorney Vanessa Childs. Our offices are open 9 am – 5 pm, Monday through Friday, and our service can reach us if you have a pressing after-hours matter.

Call (702) 666-0408


e-Mail Vanessa Childs Map to Office
I am Bankruptcy Attorney Vanessa Childs. Every day I meet good people struggling financially. I have dedicated my law practice to helping people find solutions to tough situations. It is my mission to help clients facing a debt crisis to get control of their finances and start on a path to a financially secure future. It is a very rewarding experience to meet with a client who is facing the loss of their car, home, or their family's life style as they currently know it because it all about to fall apart; to hear about the stress, anxiety, the loss of sleep, yet we are able to make a legal plan to immediately and drastically improve their situation. When you visit me, I will likely be able to reduce your anxiety so that you will walk out of my office with real hope and you'll be looking forward to a tangible and fresh start. It is my experience that anyone is but one job loss or one unexpected medical emergency away from the need for a bankruptcy attorney. Being in debt doesn’t make you a bad person. Good people can fall victim to bad circumstances. I am here to help. Knowledge is Power and we will share our knowledge with you when you have us partner with you in stopping further damage and harassment from mortgage lenders, banks, and other creditors while getting your financial life back in order.
Call our office to schedule an appointment with attorney Vanessa Childs. Our offices are open 9 am – 5 pm, Monday through Friday, and our service can reach us if you have a pressing after-hours matter. Call (702) 666-0408