There are four types of bankruptcy cases provided under the law. Our Toledo bankruptcy attorneys will explain each of them below:
- Chapter 7 is known as “straight” bankruptcy or “liquidation.” Chapter 7 bankruptcy requires an individual to give up property which is not “exempt” under the law, so the property can be sold to pay creditors. Generally, those who file Chapter 7 keep all of their property except property which is very valuable or which is subject to a lien which they can not avoid or afford to pay. When you schedule a consultation with our bankruptcy law firm, we’ll let you know if important property to you is at risk if you file for bankruptcy.
- Chapter 11, known as “reorganization,” is used by businesses and a few individuals whose debts are very large.
- Chapter 12 is reserved for family farmers and fishermen.
- Chapter 13 is a type of “reorganization” used by individuals to pay all or a portion of their debts over a period of years using their current income.
Most people filing bankruptcy will want to file under either Chapter 7 or Chapter 13. Either type of case may be filed individually or by a married couple filing jointly.