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Most people are familiar with the term bankruptcy. That’s especially if you or someone you know has ever sought the help of a bankruptcy lawyer in Baltimore, Maryland to file your own case. Bankruptcy is helpful in many ways because it allows people and businesses with debt to wipe their slate clean or come up with a repayment plan that suits their current financial state. Most people would know about Chapters 7 and 13.
The Most Common Types of Bankruptcy
This is sometimes referred to as liquidation bankruptcy and is considered the most common type of bankruptcy in the US. For this type, courts may provide businesses with a trustee who will take charge of the asset liquidations and distribute payment to creditors. Individuals who file chapter 7 are allowed to keep properties that are exempt from liquidation.
This is also known as a wage-earner plan in which people with regular income will be allowed to develop a repayment plan that lasts over a certain period of time to pay back all or parts of their debt. For this type of bankruptcy, individuals may be allowed to avoid foreclosure on their homes.
Both Chapters 7 and 13 are standard solutions that bankruptcy lawyers in Baltimore, Maryland offer to business owners and individuals who need them, but did you know that there are actually other types of bankruptcy?
The Less Common Types of Bankruptcy
This type of bankruptcy is for towns, counties, cities, school districts, and other municipalities. When Chapter 9 bankruptcy is filed, municipalities will be protected from creditors and have some time to develop a plan to adjust their debts.
This is a reorganization bankruptcy that can be filed by individuals and businesses. Unlike chapter 7, the debtor won’t hand over the assets to a trustee and does not have to sell off the entirety of its assets. For this type, businesses can attempt to change the terms of their debts, such as values of payments or interest rates.
This is designed for “family fishermen” and “family farmers” who are experiencing financial distress. For this type, the debtor will come up with a repayment plan that lasts over three to five years.
This was added to the US bankruptcy code in 2005, and it is used for cases involving more than a single country. Foreign debtors who have assets in different countries would file this type of bankruptcy. This type of bankruptcy is intended to help a foreign debtor cooperate with foreign courts as well as US bankruptcy courts so they can all reach an agreement.
If you are in a situation where you have to file for any of the Chapters mentioned above, get in touch with a renowned bankruptcy lawyer like Attorney Richard Hackerman. He is an experienced Baltimore-based bankruptcy lawyer who can help you with your case. Call us today to schedule an appointment.