Chapter 7

When you have trouble paying your bills, deciding to file for bankruptcy can be the first of many steps on your path to a better future financially. Next, you must determine what type of bankruptcy to file based on your situation, debts and plans for the future.

The most common types of bankruptcy are Chapters 7, 11 and 13. Knowing the difference between these 3 chapters is a lot like reading a textbook. It takes some time to digest all the information and learn the facts.

To save you the time and frustration of muddling through tons of information online, we’ve created this blog post as an easy reference to understand the definitions of each chapter of bankruptcy.

Donald is known for his real estate ventures, television shows and recently, political ambition. He’s come to be one of the most easily recognizable celebrities with a flashy style, iconic hairdo and straightforward manner. But did you know Trump has filed for bankruptcy four times?

And he’s not the only one. Plenty of celebrities from Mike Tyson to Francis Ford Copolla have filed for bankruptcy, be it personal or corporate. It leaves us with a common conundrum: “How can someone known for having so much wealth seemingly go broke so many times?

There’s a strange phenomenon of people seemingly having plenty of money but filing bankruptcy. Many appear to come out successful after filing even multiple times. There are cases like Donald Trump, who has filed for bankruptcy through his corporations four times but maintains a net worth of $4.5 billion. Billy Joel has gone bankrupt three times despite a net worth of $160 million.

However, when you take a quick look at the requirements for filing for bankruptcy, you may wonder if your income limits your options.

Is it possible to be too rich to declare bankruptcy? Upon reviewing cases like Trump’s and Joel’s the answer appears to be a resounding no. However, there are some critical distinctions to be aware of.

partnerships, you may file Chapter 7 or Chapter 13 bankruptcy. Be aware that filing for Chapter 7 on your own behalf will not discharge business debts.

You may also file for Chapter 7 on behalf your business. Chapter 11 bankruptcies are also available to LLCs, corporations and other small businesses. Only individuals are eligible to file for Chapter 13.

When people hear the term “small business bankruptcy,” images of overdue bills, piles of bank statements, and empty pockets often come to mind.

However, filing for bankruptcy doesn’t have to mean giving up your business forever or falling into financial ruin. In fact, a business bankruptcy will not affect you individually unless you guaranteed business debts or your business is a sole proprietorship.

Filing for bankruptcy may allow a business to eliminate some debt while restructuring their organization and staying in operation. Before pursuing any chapter of bankruptcy, it’s important to determine whether you are filing on behalf of yourself or your business.

If you find yourself in a situation where you need to file chapter 7 or chapter 13 bankruptcy, then you can make the whole experience much less stressful if you know what to expect in the coming days. Once you have filed, there are still many things you will need to do, so let’s look at what those steps will involve so that you can get through the bankruptcy and then begin rebuilding your financial life.

Bankruptcy is an often misunderstood subject that can land people in a lot of trouble when they proceed under false information. While the court system does its best to educate would-be filers, it’s not always successful. One of the main reasons people file bankruptcy in the first place is because they hope to obtain instant relief from their financial duress. While this is possible, you should understand what it entails.

Instant Relief

The moment you formally declare bankruptcy, the courts put what’s called an “automatic stay” in place. This “automatic stay” essentially “stays the hand” of any creditor trying to get their money or property back from you. Legally, they are obligated to cease any debt collection practices as soon as they’re notified of your filing (a few exceptions exist). If they continue with them, they could find themselves in front of a judge.

One of the most important parts of any bankruptcy is the schedules you have to include when declaring. Unlike other factors, schedules are present in both chapter 7s and 13s, so it’s important you understand how these forms affect your bankruptcy.

What Are Bankruptcy Schedules?

The schedules represent vital information about you that the courts need in order to process your bankruptcy. These forms will include information like how much you make, how much you owe, property you own, expenses you have, etc. As you can probably understand, then, these forms are extremely important and you need to take care with filing them. Should you make the mistake of trying to withhold any important information on these forms, you’ll find yourself in a world of trouble.

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