Quantcast

What Are the Different Kinds of Bankruptcies? - WCAX.COM Local Vermont News, Weather and Sports-

Chapter 7, 11, 12, 13

What Are the Different Kinds of Bankruptcies?

Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor's property, with the proceeds used to pay off the debts. However, the debtor can retain certain property that is specifically "exempt" under his choice of Federal law or her State's law, such as tools of one's trade, limited equity in a car and house, and some personal effects. If you use Chapter 7 you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly.

Chapter 11 is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.

Chapter 12 allows farmers with real estate debts to pay off the debts from the profits generated by future crops.

Chapter 13, which has also been known as a wage earner's plan, is used by about 25% of consumers. In Chapter 13 consumers work out a periodic payment plan with their creditors to pay off their debts, or at least substantial portions of the debt. Generally the creditors expect to get more than they would have received from the debtor's estate if the debtor had sought a complete liquidation under Chapter 7.

One of the important benefits of Chapter 13 is that the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. If the debtor fails to comply, the Court treats the matter as a Chapter 7 liquidation. The disadvantage of Chapter 13 to the debtor is that the debts can linger for years, burdening future income.

Copyright FreeAdvice, www.freeadvice.com.

  • Local NewsMore>>

  • Sen. Jim Jeffords laid to rest

    Sen. Jim Jeffords laid to rest

    Friday, August 22 2014 7:02 PM EDT2014-08-22 23:02:59 GMT
    Sen. Jim Jeffords was one of Vermont's beloved public servants, with a career that took him from the hills of Shrewsbury to the U.S. Senate. Friday, in his hometown of Rutland, James Jeffords was laid to rest.
    Sen. Jim Jeffords was one of Vermont's beloved public servants, with a career that took him from the hills of Shrewsbury to the U.S. Senate. Friday, in his hometown of Rutland, James Jeffords was laid to rest.
  • Is it safe to move accused killer Elizabeth Teague?

    Is it safe to move accused killer Elizabeth Teague?

    Friday, August 22 2014 7:09 PM EDT2014-08-22 23:09:17 GMT
    The Vt. Dept. of Mental Health says scarce resources are part of the push to relocate alleged workplace shooter Elizabeth Teague to a facility with fewer regulations. Elizabeth Keatinge was at Friday's hearing.
    The Vt. Dept. of Mental Health says scarce resources are part of the push to relocate alleged workplace shooter Elizabeth Teague to a facility with fewer regulations. Elizabeth Keatinge was at Friday's hearing.
  • Police investigate death of 13-year-old in Hardwick

    Police investigate death of 13-year-old in Hardwick

    Friday, August 22 2014 2:49 PM EDT2014-08-22 18:49:31 GMT
    Investigators say a teen was found dead at a home in Hardwick Friday morning.
    Investigators say a teen was found dead at a home in Hardwick Friday morning.
  • Vt. police say all clear in Newport

    Vt. police say all clear in Newport

    Friday, August 22 2014 11:12 AM EDT2014-08-22 15:12:45 GMT
    Police say the threat is over in Newport. Thursday night, police had asked residents to lock their doors and stay inside while authorities searched for a gunman.
    Police say the threat is over in Newport. Thursday night, police had asked residents to lock their doors and stay inside while authorities searched for a gunman.
  • NY police try to ID pharmacy burglar

    NY police try to ID pharmacy burglar

    Friday, August 22 2014 3:39 PM EDT2014-08-22 19:39:59 GMT
    New York State Police hope the public can help identify a burglar.
    New York State Police hope the public can help identify a burglar.
  • Williston police try to ID paint thief

    Williston police try to ID paint thief

    Friday, August 22 2014 4:11 PM EDT2014-08-22 20:11:41 GMT
    Police are investigating an unusual theft at the Wal-Mart in Williston.
    Police are investigating an unusual theft at the Wal-Mart in Williston.
  • Driver of overweight big rig nabbed in Vermont

    Driver of overweight big rig nabbed in Vermont

    Friday, August 22 2014 5:13 PM EDT2014-08-22 21:13:34 GMT
    The Vermont Department of Motor Vehicles says a trucker carrying part of a giant crane to a state bridge job had too much weight on his rig and too much alcohol in his system.
    The Vermont Department of Motor Vehicles says a trucker carrying part of a giant crane to a state bridge job had too much weight on his rig and too much alcohol in his system.
  • Wire fraud convict has until Friday to object

    Wire fraud convict has until Friday to object

    Friday, August 22 2014 10:29 AM EDT2014-08-22 14:29:05 GMT
    A Vermont man convicted of wire fraud for submitting false invoices to a Maine town has reached the end of his allotted time to file objections to a pre-sentencing reporting.
    A Vermont man convicted of wire fraud for submitting false invoices to a Maine town has reached the end of his allotted time to file objections to a pre-sentencing reporting.
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WCAX. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.