Different Types of Bankruptcy
Chapter 7
This is the classic form of bankruptcy. It is sometimes called a liquidation case, but most chapter 7 bankruptcy cases do not involve liquidation of property. There are exemptions used to protect property and most exemptions are subject to limits that are adjusted over time. Unless there are non-exempt assets, no payments are made to the bankruptcy trustee. Most chapter 7 cases take about 3 months to complete.
Chapter 13
This is a reorganization case for individuals and married couples. It is sometimes called a “wage earner” case but anyone with regular income including self-employed persons may be eligible. There are debt limits in chapter 13 bankruptcy that are adjusted over time. Some debts that can’t be discharged in chapter 7 may be dischargeable in chapter 13. Payments are made to a chapter 13 trustee, usually for 36-60 months.
Calculation of the amount that will be paid in chapter 13 is one of the biggest tasks for your attorney and is based on many different requirements, including your property and your income. Many clients believe that they will have to pay most of their debts back in chapter 13, but usually that is not the case. Most of the chapter 13 cases that our law firm has filed paid less than 10% of unsecured debt and many involved no payment at all to unsecured creditors.
The only way to get a reliable opinion on what you might pay in chapter 13 is to talk to an experienced California bankruptcy attorney who practices in a regular basis in the court where you will be filing. Local custom and practice can vary widely from court to court. At the Law Office of Thomas Jeffrey, we are limited to the Santa Rosa Bankruptcy Court, which handles bankruptcies for Sonoma, Napa, Marin, Lake and Mendocino Counties.
Chapter 12
This is a reorganization for “family farmers”. To be eligible to file chapter 12 bankruptcy, minimum percentages of the filer’s income must be from farming.
Chapter 11
This is a reorganization case for individuals and businesses, including corporations and limited liability companies. Chapter 11 does not have the debt limits that chapter 13 does, but it is far more complicated and expensive.
There are other chapters of bankruptcy but those normally are not used by individuals or businesses.
FREE Consultation: Contact an Experienced Northern California Bankruptcy Lawyer Today
To learn more about which bankruptcy option is right for your specific situation, schedule a FREE consultation today by calling the Law Office of Thomas Jeffrey, in Santa Rosa, California, at (707) 543-8530 or fill out our online form. We serve clients in Sonoma County, including Petaluma, Windsor, Rohnert Park, among others.
