Usually, if you type “bankruptcy” into any internet browser, you’ll only see results for Chapter 7 and Chapter 13 bankruptcy. But did you know that there are three other bankruptcy chapters that are at your disposal? Before deciding which chapter to file, you should be fully informed of the other chapters, who can apply for them, and how they’ll impact your future. For more information, contact the best bankruptcy lawyer Covington TN has to offer, the prestigious lawyers of Darrell Castle & Associates.
Just about anyone can file for Chapter 7 bankruptcy, but you must pass the means test. If you qualify, your assets are liquidated and sold off. The profit from your sales pays off your creditors. Fortunately, there is often enough left over for you to start a new life. If you’re wondering which assets of yours will be sold off, it depends. It may be your car(s), home, any land that you own, jewelry, etc. Yet, if you’re adamant about protecting certain assets from being liquidated, you and your bankruptcy lawyer can see whether applying for state or federal exemption for this property is in your best interest.
This chapter is only available to municipalities, such as school districts, towns, and counties.
Individuals and businesses may file for Chapter 11 bankruptcy. Some business owners prefer filing for Chapter 11 instead of filing for Chapter 7 bankruptcy because Chapter 11 allows business owners to remain in control of their business, and they don’t have to sell off their rights and assets.
If you’re a farmer or fisher, then filing for Chapter 12 bankruptcy may be in your best interest. This chapter is carved out exclusively for farmers and fishers who come into financial hardship. But being a farmer or fisher isn’t enough. To qualify for this relief, you must prove that you have enough income to pay off your creditors in three to five years.
You must prove that you can afford to be put on a three-to-five-year payment plan to file for this chapter. In other words, you must show proof of sufficient income. Also, your unsecured debts must be less than $419,275, and your secured debts must be less than $1,275,850.
What Can’t Be Discharged?
Now that you know more about bankruptcy chapters, it’s imperative that you know which items can’t be discharged from your debt, regardless of which chapter you file. You cannot discharge:
- Child support debt
- Spousal support debt
- Student loans
- Debt that stems from a property damage lawsuit
- Debt that stems from a personal injury or wrongful death lawsuit
- Debt from fraud
- Debt arising from property settlements in divorce proceedings
- Certain debts for luxury items that you purchased if they were within 90 days of filing for bankruptcy
We understand that this can be complicated, which is why you shouldn’t go at this without the help of experts. Call the seasoned lawyers at Darrell Castle & Associates at 901-327-2100.