6 Types of Bankruptcy

In the United States there are six types of bankruptcy, as outlined by Title 11 (aka the Bankruptcy Code) of the United States Code. While only a couple of these six types are most commonly used, it can be interesting and helpful to be educated about all the different types, known as “chapters.” Here is some information about the six different chapters of bankruptcy:

Chapter 7

The most common out of the six types, Chapter 7 bankruptcy governs the process of liquidation. Liquidation is the process by which a company or person’s assets are redistributed or dissolved, and can be either voluntary or compulsory. When a business files for Chapter 7 bankruptcy, a trustee is appointed to oversee the liquidation process. The trustee determines which of the company’s debts are binding and which creditors must be paid, versus relationships which will simply be dissolved.

When an individual files Chapter 7 bankruptcy, he or she is allowed to keep certain property exempt from liquidation. Certain types of debt do not qualify as allowable exemptions, including home mortgage, child support, and student loans.

Chapter 9

Chapter 9 bankruptcy is available exclusively to municipalities. Historically, if a municipality was unable to pay its debts, certain measures were taken, such as raising taxes. Chapter 9 bankruptcy was created during the Great Depression, when raising taxes did little to improve a municipality’s situation. In some places, a municipality must seek state approval before filing Chapter 9 bankruptcy. The two most famous Chapter 9 cases were Jefferson Count, AL, and Orange County, CA.

Chapter 11

This form of bankruptcy is available to both businesses and individuals, but it is most commonly used by corporations. Unlike the liquidation process of Chapter 7, with Chapter 11 the debtor remains largely in control of assets. Rather than having a trustee in charge, the debtor retains control under supervision from the court. Chapter 11 is geared primarily toward reorganizing a business. With the restructuring measures, however, ownership of parts of the business and rights to revenue can be passed out of the debtors’ hands and to the creditors.

Chapter 12

Similar to Chapter 13, which will be discussed below, Chapter 12 bankruptcy applies solely to farmers and fishermen. Originally, there were not any specific provisions for these agricultural professionals. Addendums and modifications were added several different times, with repeated expiration and renewal, until a permanent chapter was created in 2005.

Chapter 13

Unlike Chapter 7, which liquidates assets and offers immediate debt release, Chapter 13 is considered more of a debt rehabilitation. It is similar to Chapter 11 in that reorganization and restructuring of assets is involved. The debtor creates a plan to pay off all creditors in 3-5 years. Chapter 13 may not work for everyone because requires a certain level of disposable income to fund the bankruptcy plan.

Chapter 15

This type of bankruptcy involves cases in which assets are spread across more than one country. The provisions outlined in Chapter 15 bankruptcy help mitigate issues caused by cross-border litigation. In these cases, the U.S. courts can choose whether or not to provide additional assistance to aid an individual involved with a foreign law proceeding.


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Important Tips For Securing Car Loans Even If You Have A Bad Credit History

For anyone looking forward to getting the car of their dreams, seeking a car loan is an indispensable option. However, the going normally gets tough once your loan request is turned down due to a bad credit score. The following detailed write-up will be of great benefit to you if you’re looking for bad credit car loans.

Features of Car loans For People with Bad Credit

Interest Rates

Compared to ordinary car loans, these loans normally attract higher interest rates. Different lenders have different interest rates. It is hence very important for you to ensure that you shop around for the best deals in town. Try as much as possible not to borrow yourself into yet another debt. Other factors that affect the interest rates include the economic cycles and the number of players in the lending market.

Down Payment

Normally, you may be required to make a huge down payment before accessing these loans. Again as for this one you need to shop around for the smallest amount of down payment available within your locality. A big down payment might weaken your financial muscle thus making it a bit hard to furnish the new loan on time.

Repayment Period

Generally, these types of loans allow for a repayment period of up to 48 instalments. Though this duration is relatively shorter than for the ordinary loans, you can still learn to operate within the provided limits. As your credit score and your relationship with the lender improve, you can always negotiate for a longer repayment period.

Monthly Payments

The amount of monthly expenses is normally determined by the aforementioned factors. Basically, a high rate of interest rate and a short duration of repayment lead to higher monthly repayment amounts. However, you can get reprieve by creating a good relationship with your

Important Tips for securing car Loans with Bad Credit

If you’re looking forward towards owning your dream car through this form of financing, the following tips will indeed take you a long way.

Co-signer

One effective tip that works for people with bad credit ratings is looking for friends and family members with a good credit rating to co-sign for them. A co-signor acts as a guarantor thus raising your overall credit score. You’ll therefore be in a position to get a better deal.

Secured Loan

Another way to secure a good loan deal is by pledging your assets as collateral for the loan. It is important to remember that the asset(s) pledged can be repossessed by the lender in event of default on your part.

What other alternatives are available?

Apart from securing your car through the financial options discussed in this article, you can also explore the leasing option. This is a good alternative especially if you have a regular source of income but with a poor credit score. Through leasing, you’ll only be required to pay a monthly leasing fee for the car.

In summary, it is clear that there several alternatives that you can take if you want to get a car with a poor credit score. One of the most viable options worth considering for this financial venture is taking car loans for bad credit as discussed in this article.


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