Know about The Types of Bankruptcy

One thing that most individuals have a negative approach as soon as it is heard of is Bankruptcy. The state of an individual where he/she is financially ‘nil’ could be said to be the state of bankruptcy. Though the word gets a negative impulsive reaction towards it, yet if considered properly, it could be said to be one of the most strategic ways that is employed by those who know that they can no longer pay their creditor.

There are various types of bankruptcy that can be filed, depending on your state, or whether it is being filed by a corporation or an individual. The first kind of bankruptcy is called the chapter 7. Also known as the liquidation, this happens to be the most common type of bankruptcy. The criterion for this chapter is that the income of the debtor is below the state’s median income. The non- exempt assets are used by individuals in this to pay off as much as their debt as possible.

Types of Bankruptcy

The only disadvantage of this type of bankruptcy is that once companies have filed for this, they are hardly able to conduct business, during the liquidation process. Olympia Law PC is a law firm that houses ace attorneys who have several years of experience and hence they are able to assist so many clients smoothly through the process of bankruptcy. In fact, they even advice people to go in for this process of bankruptcy as a strategic step in their business.

There is another chapter 11 of bankruptcy which is mostly filed by large companies. These businesses are possibly in need of reorganization on a big scale so that they can pay off their debts. A time limit of 120 days is given to the debtor to submit their plan before matters get into the hands of the creditors. Unlike chapter 7, business can be still carried out through the process of bankruptcy that is filed; but the expensiveness of this type is what makes it a little disadvantageous.

The farmers and the fishermen usually file in the chapter 12 bankruptcy, which helps them to plan out their regular income and pay off their debt slowly. Since there are so many twists in the various forms of bankruptcy, it becomes difficult to comprehend by yourself which type to select for yourself. The Olympia Law PC is hence, by far, the best place to go to for seeking advice on the same.

The one benefit of going to this law firm in Los Angeles or Irvine or Glendale is that they value each and every client equally. Unlike the other law firms who prefer to stick to the elite client class, this law firm considers the cases of all the maligned, mistreated and commercially abused common people.

A federal bankruptcy court supervises and provides for the chapter 13 type of bankruptcy. The individuals still remain in control of their assets, but they are prohibited from receiving any added credit without permission from the court of bankruptcy that is handling the case.

Seeing the various types of bankruptcy, it is thus evident that this is a very commonly used tool for all business people and is not a negative term after all.