The bankruptcy laws give individuals, families, and businesses many tools to deal with debts and cash flow problems.
This overview gives you general information about the three most popular chapters of the bankruptcy code. If you are contemplating bankruptcy, we also strongly urge you to read our Bankruptcy Dos and Don'ts page before making any financial decisions. Please read that web page immediately to make sure you avoid common missteps. If you wish, you can contact us for a free consultation. You might be able to talk to an experienced bankruptcy attorney right now!
The most popular bankruptcy tool is chapter 7. Under chapter 7, individuals and households that have little or no assets may be able to wipe out some or all of their debts and start their life fresh. If you are an individual or household, and want to learn more about chapter 7, you can do so by clicking here.
Chapter 7 may not be the best remedy for certain debtors. For example, individuals who have a car loan, and want to keep the car, may be forced to sign a reaffirmation agreement in a chapter 7 in order to keep the car. Because the reaffirmation agreement can have negative consequences, the debtors may want to file a chapter 13, which will give them more freedom. In other instances, individuals who have a business, or other substantial assets, may want to avoid chapter 7 because the business or the assets might be subject to liquidation. In other cases, individuals who are behind on a mortgage and wish to keep the home, or who have tax debts or child support obligations, may want a chance to pay those debts, but wipe out most or all of their other debts. For these individuals, chapter 13 might be a better option. If you want to learn more about chapter 13, please click here.
In very rare circumstances, debtors may need complex reorganization of their debts through the bankruptcy system. For example, debtors that operate as a corporation, or individual debtors who own complex businesses, or individual debtors who have multiple real estate investments may want to reduce or wipe-out business debts, walk-away from unprofitable lease obligations, or renegotiate union agreements. For these debtors, chapter 11 may be a better option. If you want to learn more about chapter 11, please click here.By Sam Taherian
About the author:
Sam Taherian has helped over a thousand Northern California consumers wipe out their debts, wipe out second mortgages, or re-organize tax obligations through chapter 7, chapter 11, and chapter 13 bankruptcy. Sam is also a member of the board of directors of the Bay Area Bankruptcy Forum, a non-profit organization dedicated to public service.