In total there are six types of bankruptcy in the United States. San Antonio lawyer of bankruptcy can help you to understand the difference between them and will assist you in selecting the best for your case. You can contact our San Antonio bankruptcy lawyer to help you answer your queries. By consulting the bankruptcy lawyer, you get an idea what to expect once you begin filing for bankruptcy.
The six types of bankruptcy are:
- Chapter 7 or Liquidation
- Chapter 9 or Municipal Bankruptcy
- Chapter 11 or Business Corporations
- Chapter 12 or Peasants and Fisherman
- Chapter 13 or Debt Rehabilitation
Chapter 7 bankruptcy is the most common out of all the types of bankruptcy. Basically, the process of liquidation is involved in the chapter 7 bankruptcy. In the process of liquidation, either it is compulsory or voluntary to dissolve the assets of a company or a person. A fiduciary is there to supervise the liquidation process when a business organization files for chapter 7 bankruptcy. Whereas you are allowed to retain a particular amount of money from liquidation process when you file chapter 7 bankruptcy as an individual. Child support and student loans are the types of debts that are not considered eligible for allowable exemptions regarding San Antonio bankruptcy lawyer.
If municipalities want to file for bankruptcy then chapter 9 bankruptcy is the best option available to them. Even when we look at the past we come to know that if certain municipalities were not able to pay their loans then particular measures were taken to pull them out of the heaps of debt they were in. One certain measure was to raise taxes in order to benefit the municipality. Chapter 9 bankruptcy was introduced during the times of the ‘Great Depression’ when even by raising taxes it did not help much to improve the municipality conditions.
Both businesses and individuals can use this type of bankruptcy. But most of the time large business corporations use this. In this type of bankruptcy, the mortgagor has control over most of his assets. No trustee is put in charge to look at the matters, the mortgagor has control over his assets under the surveillance of the court. The basic function of chapter 11 bankruptcy is to reorganize a particular business with the help of reconstructing measures. However, some factions of the business ownership and revenue rights can be given to the mortgagees.
Peasants and Fisherman:
The chapter 12 bankruptcy is entirely related to fishermen and farmers. In the beginning, there were not many services available to these professionals. Several changes and modifications were made on numerous occasions but finally, a permanent chapter was introduced a few years ago.
We know that chapter 7 bankruptcy governs under the liquidation process in which debts and assets are immediately released. On the other hand chapter 13 bankruptcy involves debt rehabilitation. It is almost similar to chapter 11 bankruptcy where reorganization business and reconstruction of assets is done. Chapter 13 does not work for everyone. In this type of bankruptcy, the mortgagor creates a payment plan to pay off all the mortgagees in 3-5 years’ time.