Bankruptcy

Overview

• Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the Bankruptcy Court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.


• All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

Types of bankruptcy

The type of bankruptcy you file is based upon your individual circumstance.

The most common are:

• Liquidation (Chapter 7): If you have assets that have value, those assets are sold and the proceeds are distributed to creditors (including us).
• Payment plan (Chapter 13): You are able to keep your assets and pay your debt over time (usually 3 – 5 years).
• Reorganization plan (Chapter 11): Usually involves businesses that want to keep the business alive and pay debt over time.

Visit Bankruptcy Basics from the United States Courts for more information on types of bankruptcy