For families facing foreclosure, the stress and worry can be unbearable. Fortunately, there are different options available to help those struggling including Chapter 13 bankruptcy which is one option. The two primary types of personal bankruptcy offer certain benefits and can meet the needs of struggling homeowners in different situations.
Chapter 13 bankruptcy is a bit different than Chapter 7 bankruptcy in that it allows the filing party to reorganize and repay their debts according to a repayment plan that usually spans 5 years. This is different than Chapter 7 bankruptcy which allows the filing party to liquidate non-exempt assets to repay creditors. The ways to qualify for the two types of personal bankruptcy are essentially the opposite.
Credit card debt is one of the most prevalent forms of debt in American society. According to a 2017 report from USA Today, the average American holds approximately $5,551 in credit card debt. With some interest rates as high as 20 percent, some people find themselves in a hole they cannot get out of.
Chapter 7 bankruptcy can provide a fresh financial start through a liquidation bankruptcy option. If you are considering this option, however, you may wonder how to qualify. If you do not qualify for Chapter 7 bankruptcy, additional options may be available and the court may convert the bankruptcy to a Chapter 13 bankruptcy if you have a reliable source of income. The point is to not despair because different personal bankruptcy protections and options are available for different situations.
Bankruptcy options exist to help both businesses and individuals struggling with the burden of debt. Nashville guitar maker Gibson filed for reorganization bankruptcy protection recently. Similar to Chapter 13 reorganization personal bankruptcy recently discussed on this blog, reorganization bankruptcy options are also available to struggling businesses seeking to address their debt concerns and return to profitability. Chapter 11 bankruptcy provides an option for struggling businesses to do just that.