Sometimes, life happens. Maybe you had an unexpected medical emergency that ate up your savings, or perhaps you were laid off and haven’t found a new job yet. Regardless of your reason for needing a bankruptcy Maryland lawyer, it is important to understand the differences between the types of bankruptcy. Although there are many types of bankruptcy, people most often deal with chapters 7, 11, and 13. This quick guide will teach you the differences between them.
Chapter 7 is considered the most common type of bankruptcy that people file, possibly because it is also the easiest one to handle. In this type of bankruptcy, you may have assets not protected by an exemption, so a trustee can sell them to distribute profits among your creditors. Chapter 7 is best for people individuals or married couples who don’t have a high net worth.
Chapter 11 allows for the reorganization of your debts, business affairs, and assets. This is typically used for corporations and is considered the most complicated type of bankruptcy. However, it helps companies by allowing them to remain open and operating as they pay off old debts.
Chapter 13 is sometimes referred to as a wage earner’s plan. This type of bankruptcy allows individuals to use their regular income to create a repayment plan for all of some of their debts. The plan typically takes up to five years to complete and allows most people to keep their necessary assets, such as their home and car.
The hardest part of deciding to file bankruptcy is often getting through all the red tape. Luckily, an experienced bankruptcy attorney can assist you with the process. Seek out one who is experienced with your specific needs, whether that means someone who works with individuals, corporations, or both.