Bankruptcy is not something that someone should run out and do unless much consideration has been done as well being a last resort.
The six kinds of bankruptcy are:
Chapter 7 – this is mostly for personal and is a total liquidation
Chapter 9 – municipal bankruptcy
Chapter 11 – This is mainly used by businesses for reorganization
Chapter 12 – is for farmers or fishermen
Chapter 13 – is for people with regular income and they set up special payment plans for their payments which may not be as much as their normal payment buy they are still paying their debts back.
Chapter 14 – is a moral bankruptcy
Chapter 15 – is for international situations
Let’s elaborate more on the different types of bankruptcy. Chapter 7 is the most common bankruptcy for individual people. This is where the person gives up all of their property to a bankruptcy person who will sell off the property and use the proceeds of the sale to pay the loans companies. The person is no longer responsible for this debt and does not have to pay it back but they no longer own the property either. If there have been distrustful situations such as fraud or concealing property or records they may not be discharged from the debts they own. The person is not removed from paying child support or taxes. They are not required to give up household items needed to live or clothes. They can only apply for bankruptcy every 8 years.
With a Chapter 13 the person keeps owning all off their property but must give some of their income towards paying the loan companies over a period of years. How much they pay depends on several factors and this includes how much the person currently makes in income.