What is personal bankruptcy?
Personal bankruptcy is a bankruptcy filing that is designed to assist an individual. Most of the time personal bankruptcies are discussed in the terms of “consumer” debtors. However, if your debt is primarily corporate debt, you may also file a personal bankruptcy to avoid your personal responsibility for corporate debts.
A consumer debtor is one that has primarily consumer debts; that means your debts arise from the purchase of goods for personal use. So if you have overwhelming debts on personal credit cards, medical bills, your home mortgage, personal loans, judgments, or the like, you may be a candidate for a consumer bankruptcy filing.
Even if your debts arise primarily from personal guarantees on business loans, you may also benefit from personal bankruptcy.
WHAT ARE YOUR OPTIONS?
An individual has three possible bankruptcy options.
Depending on your circumstances, you may qualify for a Chapter 7 straight liquidation, a Chapter 13 restructuring bankruptcy, or a Chapter 11 restructuring. An individual Chapter 11 debtor may also utilize Chapter 11 process for what is called an “orderly liquidation.”
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