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Bankruptcy
Chapter 7 Chapter 13 Chapter 11 CORP. LIQUIDATIONS

Chapter 7 - STRAIGHT BANKRUPTCY or LIQUIDATION

A Chapter 7 bankruptcy offers a discharge or release from liability for certain types of debts. Both individuals and married couples can file Chapter 7 petitions. A Chapter 7 bankruptcy will provide a fresh start when the debtor has insufficient income to pay the debts that have accumulated. The debtor is allowed to keep certain property (exempt property) but property that is not exempt may be sold by a special trustee to pay as some of the debt that is being discharged.

Debtors that are employed and want to keep their house or a continue to pay off a car may be able to do so in a Chapter 7 bankruptcy. Chapter 7 bankruptcies are most appropriate for debtors that do not have a significant amount of property over that which is exempt.


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Chapter 13 - WAGE EARNER'S BANKRUPTCY

Some individuals who have a job or are self-employed may not be eligible for a Chapter 7 bankruptcy because they make too much money under the bankruptcy guidelines or have significant property that they want to keep that is not exempt. A Chapter 13 bankruptcy may allow debtors to pay off a small percentage of the money they owe but still be discharged from a very high percentage of their debts.

In a Chapter 13 bankruptcy, the debtor is allowed to cure defaults and stop foreclosures or repossessions by making payments through a court-approved plan that meets certain guidelines. The payments are made to a court-appointed trustee who will disburse the payments to the creditors in keeping with the plan.

My business background provides a significant advantage in advising self-employed persons who need bankruptcy relief but want to stay in business. A lot depends on the structure of the debtors business and knowing how to use the bankruptcy laws to the best of the business owners advantage is can be extremely valuable.


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Chapter 11 - BUSINESS REORGANIZATION

Depending on the ownership of the assets of a business and how the business debt is structured, a Chapter 11 bankruptcy may be necessary for a business owner instead of or along with a personal Chapter 13 filing. The Chapter 11 bankruptcy allows an ongoing to reorganize. The bankruptcy court also appoints a trustee to monitor compliance of the debtor in possession with the reporting requirements. In a Chapter 11 proceeding, the debtor files a plan of reorganization that must be approved by the court. Different proceedings apply to a "small business case" which has been filed by a "small business debtor" and normally proceeds more quickly than other Chapter 11 cases.


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CORPORATE LIQUIDATIONS

Statutory liquidations for general for profit corporations, limited liability companies, and not for profit corporations may be appropriate in certain circumstances rather than bankruptcies.


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