As bankruptcy attorneys, we are often asked about the different types of bankruptcy. Altogether, there are 4 types of bankruptcy: Chapters 7, 11, 12, and 13. Chapter 11 bankruptcy is usually filed by businesses, and Chapter 12 bankruptcy is reserved for family farmers and fishermen. That means that Chapter 7 and Chapter 13 are the two most common types of bankruptcy filed by individuals and couples. So, what’s the difference between the two?
When you file for Chapter 7 bankruptcy, most, if not all, of your debts are cancelled. This also means that you may have to surrender any property that isn’t paid for in full. In order to file for Chapter 7 bankruptcy, you must be considered eligible through the “pass the means test.” We can help you determine whether or not you are eligible for Chapter 7 bankruptcy.
Chapter 13 bankruptcy allows you to repay some, if not all, of your debts. This type of bankruptcy is ideal if you have a regular source of income and want to be able to keep making payments on your home and your car. This type of bankruptcy allows you to create a financial plan to pay back your debts in a timely manner.
If you find yourself owing debtors more than you can afford and you want to know more about bankruptcy, give the bankruptcy attorneys at Craft Law Offices in Greenville, NC a call. We can sit down with you and discuss your best options for moving forward.