If you have bankruptcy questions, you certainly aren't alone. Filing for bankruptcy can be a very confusing process, particularly at first, so here is some important information you need to know to get you through the process as quickly as possible.
First of all, keep in mind that the three most popular forms of bankruptcy filings are chapter seven, chapter eleven, and chapter thirteen. Without understanding the difference between this, it's virtually impossible to get as good a deal as possible.
Chapter seven is where you have to give up all your unprotected assets, and is probably the worst kind to have. With this method, you basically give up all your things in order to pay off your creditors, and your business is shut down.
The good news is, you start over without any debt-the bad news is, of course, you are left without many personal belongings left, and of course, you have no business anymore.
Chapter eleven is usually a more desirable option, but again, is more expensive to file for, and of course, has higher requirements you need to meet. In this case, you give the court a detailed plan you will follow in order to pay off your debts, and if approved, you don't lose any of your personal assets. Instead, you simply use the income you generate in the future to pay off your creditors.
Typically one month after you file, you will meet with your creditors in order to outline your income and expenses, and explain the plan in more detail. What should this plan entail? Here is a brief summary of the main points you need to cover.
First of all, you need to explain why you are filing, how you got to this situation, your assets and liabilities, how much money is coming in and going out, how you plan on paying off your debts (ie where the money will come from) etc.
The main point you need to remember here is that you are making the plan as opposed to the court laying one out for you, as is the case in chapter 13. This makes chapter 11 the desired option for most people, but again, can be hard to get, because if you can't clearly demonstrate your financial situation will improve in the near future, you will be out of luck.
These are the answers to some of your bankruptcy questions, but to find out exactly how to get the best deal possible, keep reading.
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