What’s the Difference Between a Chapter 11, 12, and 13 Bankruptcy?
Just because someone has decided they want to file for bankruptcy doesn’t mean they don’t want to fulfill their obligation to repay their debt. That is why there are different options when it comes to what type of bankruptcy you might want to file. To help you better understand some of your options, below is a brief explanation of what a Chapter 11,12, and 13 bankruptcy is.
Chapter 11
In you own a business or have a partnership, you might want to look into filing for Chapter 11. Most individuals who have a corporation elect to take this route as a Chapter 11 bankruptcy allows you to:
- Reorganize your finances.
- Keep your business alive.
- Pay creditors over a period of time.
- Relieve you from having to pay everything at once.
Individuals are also allowed to file for this type of bankruptcy, but again, you are going to want to sit down with one of our featured bankruptcy attorneys in Tennessee and let them share with you some advice as well as other alternatives to a Chapter 11 bankruptcy.
Chapter 12
According to the U.S. Courts, this chapter provides “for an adjustment of debts of a “family farmer” or “family fisherman,” as the terms are defined in the Bankruptcy Code.” Some who choose to file for this type of bankruptcy have a regular annual income but is looking for a way to pay back their creditors the debt that is owed. As the debtor, you would propose a repayment plan that involves you making payments over a three to five-year period. The court will sometimes approve you for a longer repayment period but that depends on your particular circumstances.
Chapter 13
“Chapter 13 allows a debtor to keep property and use his or her disposable income to pay debts over time, usually three to five years.”
As you can see, each type of bankruptcy filing is similar in terms yet they all differ. If you wish to learn more about what type of bankruptcy might be most suitable for you, all you need to do is give us a call. We have helpful agents ready to take your call and can locate a nearby TN bankruptcy attorney who can assist with your matter.
Even if you have a few questions regarding the process, it is best that you talk to a professional who has your best interest in mind and can provide you with both the pros and cons that come along with filing for bankruptcy .
