Chapter 7
A form of total liquidation, Chapter 7 is available to businesses, individuals, and couples who meet the state and federal guidelines. This form of bankruptcy generally takes the least amount of time and can typically discharge a large amount of debt.
Chapter 7 is not for everyone. The 2005 institution of the Bankruptcy Abuse Consumer Protection Act (BACPA), has made the qualification requirements stricter and is typically reserved those with limited income.
The court seizes the debtor’s non-exempt property during Chapter 7 and sells it to pay-off creditors. Debtors are entitled to keep some property if it falls into the state’s schedule of exemptions.
This kind of bankruptcy is for individuals & businesses looking for a legal path to a financial fresh start.
Chapter 11
Chapter 11 is typically a form of business bankruptcy, but sometimes is used as a debt-management tool for individuals with a high net worth or for people with inconsistent income. By far the most distinguishing feature of this chapter is the ability for the debtor to remain in possession of their assets during the process.
Holding onto assets during bankruptcy can be a positive benefit for businesses:
- Keeping your business running with necessary assets
- Hands-on management of debt
- Liberty to make decisions concerning sale of assets
Above all, Chapter 11 is meant to help businesses & individuals reorganize and restructure their financial affairs so that they can continue to a profit-yielding entity and aim toward a stable financial future.
Chapter 13 bankruptcy—a debt-management plan
Chapter 13 bankruptcies have recently become a common form of bankruptcy for individuals. This chapter requires the debtor to examine their financial situation and develop a repayment plan over the next 3 to 5 years.
Chapter 13 bankruptcy offers several benefits for individual consumers:
- Ability to retain valuable property—home, car, boat, etc.
- Long-term credit reform & stability
- Sense of value of paying off debt
- A personalized debt-management solution
Chapter 13 bankruptcy is called a “wage earners’” bankruptcy because it offers people with a steady source of income the opportunity to pay back debts owed based on the amount of disposable income they have available.
At the Law Offices of Fife & Cesta, PLC personal & business bankruptcy is all about finding the right solution to manage debt—situation by situation.
Call our firm at 877-338-2270 or use our contact form to learn more about Chapter 7, 11 & 13 and for help with filing bankruptcy in Mesa and the surrounding East Valley cities.