Personal & Business Bankruptcy in Winston-Salem
Chapter 7, Chapter 11 and Chapter 13 in Winston-Salem , NC
When people consider filing bankruptcy they are often under the assumption that there is only one way their debts can be resolved. There are, in fact, many different ways to file for bankruptcy and they are referred to as “Chapters”. The most commonly used Chapters are Chapter 7, Chapter 11 and Chapter 13.
There are two chapters that are primarily utilized for personal bankruptcy. In Chapter 7 proceedings, all of your non-exempt assets are given over to a trustee. The trustee has the task of liquidating your non-exempt assets and selling them for as much as possible. This is why Chapter 7 is also known as “liquidation.” However, many cases are designated “no asset” cases because there are no non-exempt assets and the trustee has no property to liquidate.
Whatever money is recovered when your non-exempt assets are sold is then turned over to your trustee to distribute to your creditors. This money is accepted as repayment of your debt. However, to obtain debt forgiveness under Chapter 7 in
Chapter 13 is the second type of personal bankruptcy most commonly used in
A Chapter 13 filing allows you to propose a system of repaying your debts. There are a variety of differences between this and liquidation:
- It gives a debtor time to bring a mortgage or other secured loan current (and not lose the property)
- In certain situations, Chapter 13 can allow an individual to strip a lien from a residence.
- Chapter 13 can also assist individuals with repaying tax liabilities.
- Chapter 13 allows individuals to repay a portion of their debt over a 3 year or 5 year plan.
- Chapter 13 can also assist individuals with domestic support obligations arising from equitable distribution.
Business bankruptcy in Winston-Salem
If a business is owned and run by more than one person, it can file a bankruptcy proceeding under Chapter 11. This form of bankruptcy is usually for businesses and corporations, and is sometimes referred to as “reorganization.” However, in certain limited circumstances, individuals may also file a Chapter 11 petition.
The reason a Chapter 11 has this nickname is because it allows the business’ owners to reorganize how the company is run in an attempt to make it profitable. If a company is profitable, a Chapter 11 can assist the company in restructuring debt.
It is important to note that sometimes a reorganization involves lay-offs, closing outlets, or negotiating with creditors to repay their bills for a lower amount, over a longer period of time. There are many ways that Allman Spry Leggett & Crumpler can assist you when your business must file for Chapter 11.
