Different types of bankruptcies in the market

In a business or any other economic activity in Huntsville market, there are risks and other factors associated that can either make the business boom with prosperity and function in excellency or can make them shatter or burdened with debts. Now, these debts are often able to be met however in some cases the accompanying situations and the debt amount becomes so huge that the person needs to file for bankruptcy in front of the legal authorities. This bankruptcy clause either waves off the debts partially or completely based upon the case. This is why to make their appeal stronger, people hire Pleva Bankruptcy Lawyer Huntsville. Here are some of the common types of bankruptcies.

Chapter 7

This one is the most common case of bankruptcy for individuals, also known as straight bankruptcy or liquidation.  In this, the entire liquidation process is overseen by a court appointed trustee, in which the assets of the bankrupt person are sold off to the creditors in order to pay off the creditors either partially or fully. However, it does not erase the debts that cannot be forgiven like taxes and student loans.

Chapter 13

Chapter 13 of bankruptcy is a different approach, where the court does not write off the debts of a person instead re-organizes it into a more manageable form. In this case, the court creates a monthly plan for the repayment of debt to the creditors in a period of four to five years. This bankruptcy option arranges for the partial payment to the unsecured creditors and complete payment to the secured ones.

Chapter 11 

The prime aim and central character of this type of bankruptcy is re-organizing the business or the corporation. In this the business and its members decide upon a plan to re-organize the business and continue its operations while continuing to pay off the debts on a regular basis. The plan requires the approval of the court as well as the creditors to be allowed for implementation.