Types Of Bankruptcy- The Six Types

<h1>Types Of Bankruptcy- The Six Types</h1>Author: <a title="Mercy Maranga" href="http://www.articlesbase.com/authors/mercy-maranga/76674.htm">Mercy Maranga</a> When people are faced with financial problems they can sometimes not know where to turn. Should you choose bankruptcy as an option, then you should be armed with the facts. You should understand how each works, since they can be confusing at times. This will help you select what suits your situation. These bankruptcy codes are designed to protect the consumer from financial stress. There are six types of bankruptcy chapters under the United States Code. One type is Chapter 7 which is also known as liquidation bankruptcy. It is also the most popular. It is designed to liquidate a debtor’s non exempt assets and the funds acquired uses to pay creditors. It may take about 3 months from start to finish but the down side is that it will reflect on your credit report for at least ten years. In addition, if you file under this chapter, you may not be permitted to file bankruptcy again for another eight years. Little is known of the Chapter 9 type of bankruptcy. It is designed for municipalities. This could be a city, town, villages etc. It involves restructuring of debts so that the debtor is able to repay its creditors. The other type of bankruptcy is Chapter 11. Under this chapter, business can reorganize their debts while still in operations. The debtor then creates a reorganization plan to repay debts. This plan has to be approved by the creditors. The Chapter 12 type of bankruptcy is mostly designed for the protection of farm owners and fishermen. The debtor has control on the repayment strategy of how to pay all or part of the debt. Chapter 13 bankruptcy works best for individuals who are willing to reorganize their debt with a repayment plan. The debtor shoulders the repayment of debts which reflects positively on your credit score. This reduces the years your credit score is affected from 10 to 7 years. Chapter 15 type of bankruptcy is new, and involves dealing with international cases that involve debtor issues. This type of bankruptcy supports choices to foreign bankruptcy courts that need assistance.About the Author: Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. <A href="http://macypages.com/finance/?p=160">Bankruptcy</A> 
Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/finance-articles/types-of-bankruptcy-the-six-types-1116076.html" title="Types Of Bankruptcy- The Six Types">Types Of Bankruptcy- The Six Types</a>

When people are faced with financial problems they can sometimes not know where to turn. Should you choose bankruptcy as an option, then you should be armed with the facts. You should understand how each works, since they can be confusing at times. This will help you select what suits your situation. These bankruptcy codes are designed to protect the consumer from financial stress. There are six types of bankruptcy chapters under the United States Code.

One type is Chapter 7 which is also known as liquidation bankruptcy. It is also the most popular. It is designed to liquidate a debtor’s non exempt assets and the funds acquired uses to pay creditors. It may take about 3 months from start to finish but the down side is that it will reflect on your credit report for at least ten years. In addition, if you file under this chapter, you may not be permitted to file bankruptcy again for another eight years.

Little is known of the Chapter 9 type of bankruptcy. It is designed for municipalities. This could be a city, town, villages etc. It involves restructuring of debts so that the debtor is able to repay its creditors. The other type of bankruptcy is Chapter 11. Under this chapter, business can reorganize their debts while still in operations. The debtor then creates a reorganization plan to repay debts. This plan has to be approved by the creditors.

The Chapter 12 type of bankruptcy is mostly designed for the protection of farm owners and fishermen. The debtor has control on the repayment strategy of how to pay all or part of the debt. Chapter 13 bankruptcy works best for individuals who are willing to reorganize their debt with a repayment plan. The debtor shoulders the repayment of debts which reflects positively on your credit score. This reduces the years your credit score is affected from 10 to 7 years.

Chapter 15 type of bankruptcy is new, and involves dealing with international cases that involve debtor issues. This type of bankruptcy supports choices to foreign bankruptcy courts that need assistance.

Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. Bankruptcy

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