Choice of Chapter 7 or Chapter 11 Bankruptcy

Columbus GA Bankruptcy Lawyer

Everyone knows that filing for bankruptcy in an emotional as well as financially overwhelming process. Most often it is seen that people are confused at deciding on which chapter to file for bankruptcy under. Consulting a bankruptcy attorney would be a good solution under the circumstances. Even then, choosing between a chapter 7 and a chapter 11 bankruptcy can be tricky. You need to understand them in detail so as to decide on one that best fits your situation.

Identification

Chapter 7 is liquidation bankruptcy and all unsecured and credit card debts can be discharged through this. All unprotected assets will be sold and money recovered is used to pay off creditors. Chapter 11 bankruptcy is used by organizations to continue with operations with reorganization in place. When an individual files for chapter 11, he can seek to be granted adjustments in debt repayment time period and even debt reduction.   Reorganization of debts is possible through chapter 11.

Monthly Income and Expenses

Your income can help you decide between chapter 7 and chapter 11. A person with high net worth normally files under chapter 11. To file for bankruptcy under chapter 7, you need to pass the means test and have an average monthly income less than your state’s median income. Thus amount of disposable income to repay a minimum portion of your debts is necessary for chapter 11. The majority of people who file for chapter 11 are above average income group who are facing a bad financial turn of event and need more time to repay and reorganize their debts.

Asset Evaluation

You need to disclose all your assets under both chapter 7 and chapter 11. People with very few assets or assets which are exempted can file under chapter 7. Exempted assets include clothing, pensions, car, and home, household goods etc. Retention of home is with respect to available equity in it. Persons filing for chapter 11 bankruptcy have more than a million dollars worth of property.

Role of Trustee

Trustee is appointed by bankruptcy court in both chapters 7 and chapter 11 bankruptcies. The trustees provide guidance and oversee the bankruptcy process. They work with creditors and ensure that they are paid and notified of the repayment plan. In chapter 7 bankruptcy, trustee secures all assets of debtor, sees to it that they are liquidated and repays all creditors with proceeds from the liquidation. Left over money can be used to pay off unsecured loan creditors. In chapter 11, trustee works with debtor to calculate average monthly income and drafts a repayment plan for payment of all outstanding loans. Complete repayment would take place within a period of three to five years and your assets are protected.

If you are searching for Columbus GA bankruptcy attorney or interested in Chapter 11 bankruptcy.

Our Chapter 11 bankruptcy law firm is based in Columbus, GA. We handle debt relief cases near Columbus Georgia, Chattahoochee County, Harris County, Marion County, Muscogee County, Lagrange, Albany, Newnan, Peachtree City, Carrollton, Troup County.