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Under bankruptcy law, there are three ways to file personally: chapter 7, chapter 11, and chapter 13. Each type has drawbacks and advantages, as well as specific eligibility requirements. If you happen to be eligible for more than one kind of bankruptcy, it’s essential to choose the best approach for your particular situation. Below,the team at Brian R. Cahn & Associates of Cartersville, GA, explains the major differences between each type so you can determine which one might apply to you. 

Chapter 7

Also known as “liquidation bankruptcy,” chapter 7 is designed to give debtors a fresh start. Instead of paying back their debt, those who file for chapter 7 liquidate non-exempt assets. The funds from doing so go to their creditors, and any applicable debt that remains after the money has been distributed is discharged. Chapter 7 is for individuals who have little to no disposable income and would not have been able to make minimum payments even if they had consolidated what they owe.

Chapter 11

bankruptcy lawChapter 11 is a kind of reorganization bankruptcy that businesses typically file; however, it is also for individuals who may not be eligible to declare chapter 7 or chapter 13. If you file chapter 11, you can typically retain most or all of your assets. Instead of liquidating them, you must devise a reasonable payment plan with the help of your bankruptcy law attorney. Any creditors will then be allowed to vote on whether the plan is acceptable. If they deem it satisfactory, the court will likely sign off on it. At the end of the payment plan, any applicable debt that remains will be discharged. 

Chapter 13

Chapter 13 is essentially a simpler version of chapter 11 for individuals. If you have some disposable income to pay back debtors but are overwhelmed with the current arrangements, chapter 13 will allow you to devise a more manageable payment plan and retain even your non-exempt assets in the process. If the court approves the proposition, the plan will go into effect and upon its completion—typically three to five years later—any remaining debt will be discharged. 

If you want to learn more about the different kinds of bankruptcy or are ready to begin the filing process, turn to Brian R. Cahn & Associates. Based in Cartersville, this bankruptcy law firm helps clients throughout Northwest Georgia achieve the debt relief they need. Brian Cahn has 25 years of experience practicing law and helping individuals regain their financial footing. Visit his website to explore all his areas of expertise, including commercial bankruptcy, lien stripping, and foreclosure defense. You can schedule an initial consultation with a compassionate bankruptcy law attorney by calling (770) 382-8900. 

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