Free Do It Yourself Bankruptcy Kit
Bankruptcy 101
If you already have exhausted all your efforts on saving your property, still failed meeting your monthly mortgage payments, financial problems continues to persist, then there is no other course to take but to declare bankruptcy.
The Federal Bankruptcy Code, Title 11 of United States Code, discussed bankruptcy details such that it can be understood clearly by struggling borrowers. Objectively, the code supports various financial conditions of debtors. There are 4 bankruptcy filings described under Title 11 bankruptcy code.
Chapter 7 Bankruptcy – Liquidation of Assets
Simply put, this is where individuals and establishments need to sell their assets to pay off debts or part of it, with the exemptions of primary residence and personal belongings as stated by federal and state law. Once a borrower filed bankruptcy under this filing, a trustee or administrator will work on selling his or her assets and pays the creditors from the sale. Usually though, the liquidated assets will not be enough to cover all debts. Some of those obligations will be forgiven or discharged but others known as non-dischargeable debts, such as taxes and student loans, will just have to be carried over in the next filing, which will be in the next seven years.
Chapter 11 Bankruptcy – Reorganization
This form of bankruptcy is most preferred by large corporations and partnerships because of the following reasons:
- Unlimited amount owed.
- Debtors hold in possession of their assets.
- With court supervision, businesses can still operate for the benefit of the creditors. However, if found unproductive, a trustee will take over.
It is in this filing that an appointed creditors committee will be chosen by the U.S. Trustee to look over the ventures of the debtor. In the same committee that debtor will propose an acceptable plan of reorganization which shall take effect depending on their votes. If it gets disapproved, debtor can propose another plan as long as it passes statutory laws.
Chapter 12 Bankruptcy – Adjustment of debts of a family farmer/fisherman with regular annual income
Since their income is dependent on the season, struggling family farmers and fishermen can propose and carry out a plan that is manageable and sustainable to their regular annual income. Compared to Chapter 11 and 13, this bankruptcy law is less complicated, inexpensive and streamlined, made easy for farmers and fishermen to meet.
Chapter 13 Bankruptcy – Adjustment of debts of an individual with regular income
Individuals with monthly steady reliable income with less than 
$269,250 unsecured debt and no more than $807,750 secured debt are qualified to apply bankruptcy under Chapter 13 without the fear of liquidating their assets. Debtor shall propose a structured repayment plan and the court will either approve or revise. Once approved, the debtor will adhere to all agreements for three to five years.
By comparison, both Chapters 7 and 13 give full debt discharge opportunity that is not applicable in Chapter 11. Generally, individuals prefer to file bankruptcy under Chapters 12 or 13 because firstly, there is no need for liquidation of assets and secondly, debtors will only pay percentage of what was originally owed. Between Chapters 11 and 13, although quite the same by principle, the latter has criteria on the amount of money owed to qualify.
Remember that filing for bankruptcy is voluntary in nature and there are consequences to take. For one, it will definitely ruin your credit record for some time. So the decision must be made after taking everything into consideration. Seeking the help of a financial counselor or a lawyer would be wise in identifying which bankruptcy filing is suitable to your case.
This free bankruptcy kit Includes:
- Step-By-Step Instructions
- Debt Worksheet
- Comprehensive Debt Worksheet
- Income History Worksheet
- Asset Checklist
- Monthly Budget Worksheet
- Duty To Disclose all Assets Form
- Duty To Disclose all Creditors Form
- And Much More...100% Free :)
Free Bankruptcy Forms & Worksheets!
