Types of Bankruptcy

Understanding Houston Personal and B2B Bankruptcy

There are several kinds of personal and business bankruptcy.  Always consult an experienced attorney to protect yourself and your financial future in a Houston business work out or a Katy personal bankruptcy.

Three business and personal bankruptcy types

The three basic forms of bankruptcy are:

• Chapter 7 bankruptcy, also known as liquidation.  This involves selling off assets to pay debts.
• Chapter 11 bankruptcy, also known as reorganization.  This form of business bankruptcy allows an individual or business to reorganize debt and work out a payment plan to satisfy creditors over a period of time.
• Chapter 13 bankruptcy, also known as adjustment of debts of an individual with regular income.  This involves setting up a payment plan to satisfy creditors over three to five years.

Chapter 7 bankruptcy

A Chapter 7 bankruptcy allows an individual or business to sell off assets in an organized fashion to pay creditors, while removing immediate pressure from creditors.  Debts that remain after all eligible assets are sold may be discharged entirely.

An automatic stay goes into effect as soon as a Chapter 7 bankruptcy filing is made.  This prohibits creditors from collecting on debts, contacting the debtor, initiating new lawsuits, or commencing wage garnishment.

Chapter 11 bankruptcy

Chapter 11 bankruptcy is available to individuals and businesses, regardless of the size of debt involved.  A Katy B2B bankruptcy is more flexible than Chapter 13, but somewhat more complex.

Chapter 11 bankruptcy allows for reorganizing debt and working out a payment plan to satisfy creditors over time.  Usually, a Houston or Katy business work out plan lowers payments and makes debt more affordable, while preventing creditors from pursuing collection efforts during the payment period.  Business bankruptcy also allows some companies to restructure and void certain contracts.

Chapter 13 bankruptcy

Chapter 13 bankruptcy is available to individuals with regular incomes whose debt does not exceed certain limits.  A Chapter 13 bankruptcy filing can stop foreclosure on a home and allow the debtor to pay off delinquent mortgage payments over time.  Filing under Chapter 13 can simplify the bill payment process and relieves the debtor from dealing directly with your creditors.

Consult with us

Jack N. Fuerst & Associates, P.C. offers all clients a free initial consultation.  We also offer evening and weekend appointments for the convenience of our clients.  Please contact Jack N. Fuerst & Associates, P.C. at 1-866-641-0123 or contact us online.