Key Distinctions Between Different Forms of Bankruptcy

Bankruptcy laws in this country are set forth as part of the United States Bankruptcy Code, but there are many fundamental differences which separate the forms of protection that are offered. The Bankruptcy Code is divided into chapters, and each chapter is designed to address different classes of debtors and different financial circumstances. As it becomes increasingly challenging to keep pace with one’s personal or business obligations, it may be appropriate to consider filing for bankruptcy protection. But it is important that a potential filer not be confused about the effect of the different chapters.

The Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C., are prepared to help you identify the right course of action for your current debt situation. To schedule a free initial consultation and learn more about getting a fresh financial start, contact us today at 480-829-0494. We are passionately committed to helping our clients get back in control of their finances.

Understanding the Bankruptcy Chapters

Most people are familiar with Chapter 7 bankruptcy, even though they may not have an accurate picture of what it does and does not accomplish. There are several other kinds of bankruptcy, however, about which a debtor may have little or no knowledge. Here are some important details about various kinds of bankruptcy:

• Chapter 7 – often referred to as a liquidation bankruptcy, Chapter 7 may discharge an individual’s debts, rendering them permanently forgiven in exchange for the compulsory sale of some assets; available to individuals and businesses
• Chapter 9 – permits municipal entities such as cities and counties to reorganize their operations and their debt repayment agreements
• Chapter 11 – primarily used by businesses, but also available to individuals, Chapter 11 enables filers to restructure their repayment arrangements without discharging debts
• Chapter 12 – similar to Chapter 11, Chapter 12 Bankruptcy is limited to small family farming and fishing enterprises where the majority of the debts are associated with the operation of the business.
• Chapter 13 – available only to individuals who are employed at the time of the filing, debts are paid pursuant to the terms of a 3-5 year bankruptcy plan established during the proceedings
• Chapter 15 – a recent addition to the United States Bankruptcy Code, Chapter 15 exists to address American-based debts of foreign businesses

Contact Us

There is no need to continue scrambling to keep up with an unmanageable debt load. Contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C., at 480-829-0494 to learn how we can help you.