Bankruptcy can be classified into several different types. For example, Chapter 11 is for businesses, while Chapter 12 is for individuals and farmers who want to reorganize their businesses. There are many benefits and drawbacks to each, and understanding them will help you decide which one is right for you. Fortunately, there are many different types of bankruptcy, and you can find a filing that suits your unique situation.
Major types of bankruptcy
There are two major types of bankruptcy: Chapter 7 and Chapter 11. Each of these has distinct advantages and disadvantages. A person who files for chapter 7 will lose most of their assets, and they will wipe out their debts. However, in a Chapter 11 filing, you can keep your assets, restructure your debt, and continue to operate. This type of bankruptcy is the best choice if you are a business owner or have a significant amount of personal property.
Aside from the financial impact, bankruptcy will affect your personal life in many ways. You may be denied a job, buy a house, or even start a business. Furthermore, bankruptcy only eliminates your debt, which will continue to follow you around even after you file for a chapter 7 discharge. If you have student loans, government debts, or alimony, your bankruptcy will not eliminate all of these obligations.