If you or your business are facing financial troubles and are wondering about what to do next then filing for bankruptcy may be the correct next step to take. Bankruptcy is a way for businesses or individuals to find ways to fix their finances and pay back debts in a few different ways. Many people and companies file for bankruptcy each year to alleviate the strain that debts have placed on them. If you would like to learn more about the difference between chapter 7 and chapter 13, and even other types of bankruptcy then keep reading to learn from a chapter 7 bankruptcy lawyer Tampa, FL at Carolyn Secor, P.A.
Difference Between Chapter 7 and Chapter 13
Chapters 7 and 13 bankruptcies are quite similar in some ways. They both are filed by individuals and are ways that individuals can repay creditors. They both seek to alleviate debt from individuals and work to establish a plan to overcome the debt. However, they have one key aspect that is different. The main difference between these two bankruptcies is that chapter 7 sees assets liquidated. This means that certain assets will be sold off to help repay creditors the debts that they are owed. However, if someone has a primary car or home that they need then these assets may be spared. Chapter 13 differs from this in that it works as a repayment plan over a span of 3-5 years. Chapter 13 also doesn’t require liquidation. Therefore, it can be understood that chapter 7 is the liquidation bankruptcy and that chapter 13 is the repayment plan bankruptcy, in simpler terms.
Other Types of Bankruptcy
The other types of bankruptcies that exist are for different types of businesses or government entities. A chapter 9 bankruptcy is used by municipalities, like cities and school districts, to help repay debts they owe to creditors. Liquidation is very seldomly required for chapter 9. Chapter 12 bankruptcy is for fishermen and farmers. Fishermen and farmers are able to keep their assets while they establish a plan with creditors to repay their debts. Chapter 11 is the bankruptcy type that large organizations or companies may file for when they get into financial trouble. They work out a repayment plan with creditors while still being able to operate the company. Finally, a chapter 15 bankruptcy is for international cases where a financial interest may be vested in another country as well as the United States.
Legal help is something that many individuals, companies, organizations, and other entities turn to in times of financial stress and debt troubles. If you are looking for an attorney, choose a lawyer that has ample experience and skill in the realm of bankruptcy law. Having an experienced lawyer guiding a business or individual through the bankruptcy process can make the entire experience easier. It may also help the repayment plan to be more favorable for the debtor.