Often time life throws things at us the lead to financial difficulties. This may be a divorce, a health issue, loss of employment or other life event. Chapter 7 exists to provide a fresh start after that event, discharging all debts and allowing one to start with a clean slate.
Rebuilding credit after chapter 7 is ussualy important to many and easier than you think (there is no truth to the myth that you will be wrecked for 10 years after bankruptcy).
Chapter 7 is a simple, fast and cost-effective way to get out of debt and get back toiling your life again.
For small businesses who are closing down rather than trying to reorganize. If your business is organized as and LLC or Corp, the entity can do a chapter 7 liquidate any business assets and discharge all debts. But, often times small business debts are personally guaranteed which may trigger the need for a personal bankruptcy either chapter 7 or chapter 13 depending on personal finances.
The most common situation where chapter 13 can be useful is when a family has gotten behind on a home mortgage loan and is now in a position to get back into repayment status. Chapter 13 provides the means to catch up of, usually 60 months, even if your bank has said "no" to a loan modification.
Chapter 11 is a more complex form of bankruptcy used to restructure debt to save a business. Historically, chapter 11 was reserved for larger businesses due to the high cost and complexity of a chapter 11. Recently, a simpler version of chapter 11 was created known as Subchapter V allowing a small business to restructure and save the business,
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