Filing personal bankruptcy involves considering various options along with the necessity to be aware of different kinds of bankruptcy that are available for filing. The process of filing personal bankruptcy involves a lot of effort and also consumes a lot of your energy. The process of filing bankruptcy leaves profound implications for the person who has claimed for bankruptcy protection. This stressful condition can be lessened by the accumulating knowledge about the kinds of bankruptcy available along with their associated procedures.

Basically three different kinds of bankruptcy protection options are available -- Chapter 13, Chapter 11 and Chapter 7. The bankruptcy law applies basically to the large organizations that have been struck with a huge amount of debt, in fact a lot more then what is possible for them to serve. Chapter 7 and Chapter 13 account for filing of personal bankruptcy.

Chapter 7 Bankruptcy
The Chapter 7 bankruptcy law is considered the more severe of these two types and is available for filing by both an individual and company. Filing personal bankruptcy under Chapter 7 means that the maximum of the present unsecured debts you posses, have the chance of being dismissed but only after all the secured loans have been paid.
When you file bankruptcy under Chapter 7, your liquid assets get submitted in the court in order to finalize dealing with litigations. You will also need to qualify a test before bankruptcy under Chapter 7 is declared. This test is to find out if you're crossing them is about the income or not.

Chapter 13 bankruptcy
Both regular wage making people and small business owners can file bankruptcy under Chapter 13. Only those people should find bankruptcy under this chapter for whom it is getting tougher to service their mounting debt. The most important feature of this kind of bankruptcy is that you can re-pay all your debt by getting a long time span for repayment. This chapter has the provision of dealing payments over a specific period of time along with a little reduction in amount that needs to be paid to creditors.
Filing personal bankruptcy under Chapter 13 is preferred than that of Chapter 7 bankruptcy as it provides a means of re-establishing the same financial credit worthiness as before and the step out of the present financial hardships.


Debbie Joneta also writes about Bankruptcy and Credit issues including File Personal Bankruptcy and How to Declare Bankruptcy

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