CHAPTER 7 BANKRUPTCY
For individuals seeking debt relief and a financial fresh start, Chapter 7 bankruptcy is often the best route to pursue. In fact, nearly 85 percent of the bankruptcies filed in Colorado last year were Chapter 7 bankruptcy cases.
When filing for Chapter 7, borrowers can effectively get some of their serious debt discharged (i.e., forgiven) while protecting some of their treasured assets (like their home and car) by taking advantage of bankruptcy exemptions. Credit card debt, medical debt and mortgage debt is among the types of debt that can be discharged through Chapter 7 proceedings.
CHAPTER 13 BANKRUPTCY
When people don’t qualify for Chapter 7 bankruptcy (because, for instance, they earn too much money or they have recently filed a Chapter 7 case), filing for Chapter 13 bankruptcy can be their best option for debt relief. Also referred to as reorganization bankruptcy, Chapter 13 requires that borrowers develop repayment plans that detail how they will pay their outstanding debt to creditors over the course of three to five years.
CHAPTER 11 BANKRUPTCY
Chapter 11 bankruptcy, also referred to as corporate or business bankruptcy, is a more complicated debt relief solution for distressed enterprises. In general, Chapter 11 bankruptcy cases will involve developing a reorganization plan for the struggling business in order to help relieve some of its debt, streamline its operations and help it become profitable.
In some cases, Chapter 11 proceedings may involve planning for the partial liquidation of a business’ assets or planning for other efforts to reorganize the business and resolve its debt while it continues to operate.