{"id":3522,"date":"2020-12-22T08:57:03","date_gmt":"2020-12-22T08:57:03","guid":{"rendered":"https:\/\/phoenixfreshstartbankruptcy.com\/?p=3522"},"modified":"2021-01-14T07:58:29","modified_gmt":"2021-01-14T07:58:29","slug":"personal-bankruptcy-types-explained","status":"publish","type":"post","link":"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/","title":{"rendered":"Personal Bankruptcy Types Explained"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">For a debtor struggling with debt, declaring bankruptcy can be the debt relief solution you\u2019re looking for. But before you can start filing bankruptcy, it\u2019s important to know the different types of bankruptcy and how these bankruptcy types can address your financial concerns. Read on to learn more about Chapter 7 and Chapter 13 bankruptcies.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Whats_the_difference_between_personal_and_business_bankruptcy\"><\/span><span style=\"font-weight: 400;\">What\u2019s the difference between personal and business bankruptcy?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662cfc570ad4f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662cfc570ad4f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#Whats_the_difference_between_personal_and_business_bankruptcy\" title=\"What\u2019s the difference between personal and business bankruptcy?\">What\u2019s the difference between personal and business bankruptcy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#What_is_Chapter_7_bankruptcy\" title=\"What is Chapter 7 bankruptcy?\">What is Chapter 7 bankruptcy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#Who_can_file_for_Chapter_7\" title=\"Who can file for Chapter 7?\">Who can file for Chapter 7?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#What_is_Chapter_13_bankruptcy\" title=\"What is Chapter 13 bankruptcy?\">What is Chapter 13 bankruptcy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#Who_can_file_a_Chapter_13_bankruptcy\" title=\"Who can file a Chapter 13 bankruptcy?\">Who can file a Chapter 13 bankruptcy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/personal-bankruptcy-types-explained\/#Which_type_of_bankruptcy_is_right_for_me\" title=\"Which type of bankruptcy is right for me?\">Which type of bankruptcy is right for me?<\/a><\/li><\/ul><\/nav><\/div>\n\n<p><span style=\"font-weight: 400;\">Before discussing the two types of personal bankruptcy, it\u2019s important to first differentiate it from business bankruptcies. An individual or married couple can file for personal bankruptcy under either Chapter 7 or Chapter 13. Sole proprietors can also file bankruptcy since their assets are considered personal. However, a business bankruptcy filing is limited to Chapter 7, and cannot file bankruptcy through Chapter 13.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Chapter_7_bankruptcy\"><\/span><span style=\"font-weight: 400;\">What is Chapter 7 bankruptcy?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Chapter 7 or liquidation bankruptcies are the most common type of bankruptcy filed by debtors. As the name implies, a <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-7\/\"><strong>Chapter 7 bankruptcy filing<\/strong><\/a> involves liquidating your nonexempt property to pay off a portion of your debt and repay your creditors. According to bankruptcy laws, the bankruptcy trustee assigned to your case is responsible for selling your nonexempt and distributing the proceeds as repayment to an unsecured or secured creditor.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since a Chapter 7 bankruptcy discharge can discharge most consumer debts and eliminate your liabilities at the end of the bankruptcy process, this type of bankruptcy is considered to be the most direct path to get a fresh start financially.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_can_file_for_Chapter_7\"><\/span><span style=\"font-weight: 400;\">Who can file for Chapter 7?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><img decoding=\"async\" class=\"alignright wp-image-3523 \" src=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types-300x214.jpg\" alt=\"bankruptcy types\" width=\"327\" height=\"233\" srcset=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types-200x143.jpg 200w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types-300x214.jpg 300w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types-400x286.jpg 400w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types-600x428.jpg 600w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/bankruptcy-types.jpg 626w\" sizes=\"(max-width: 327px) 100vw, 327px\" \/>Not everyone can file a Chapter 7 bankruptcy. To be eligible to file for bankruptcy, you need to show that your monthly income isn\u2019t enough to pay off your unsecured and secured debts through the means test. Means testing involves comparing your monthly income to the state median income level of a household the same size as yours. By taking your living expenses and allowed deductions into consideration, the means test will determine if your disposable income is enough to pay-back your unpaid debts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re not sure if you qualify for Chapter 7, speak with a <\/span><b>local bankruptcy lawyer<\/b><span style=\"font-weight: 400;\"> to determine your eligibility given your financial situation.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Chapter_13_bankruptcy\"><\/span><span style=\"font-weight: 400;\">What is Chapter 13 bankruptcy?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Chapter 13 bankruptcy filings are also known as the wage earner\u2019s plan. This bankruptcy type involves the reorganization or restructuring of both secured and unsecured debt into a three-to-five-year payment plan. The amount you\u2019ll pay in the repayment plan is usually only a portion of what you owe since you only have to plan monthly payments for your priority debt and other qualifying debt.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_can_file_a_Chapter_13_bankruptcy\"><\/span><span style=\"font-weight: 400;\">Who can file a Chapter 13 bankruptcy?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A debt limit is imposed for Chapter 13 bankruptcy filers. The total amount owed for both unsecured and secured debt shouldn\u2019t exceed the corresponding state limit to be considered eligible for Chapter 13. Generally, debtors who failed the means test can convert their bankruptcy case to Chapter 13 to be able to declare bankruptcy. Others consider <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-13\/chapter-13-bankruptcy-phoenix-arizona\/\">filing Chapter 13 bankruptcy<\/a> to protect assets that aren\u2019t considered exempt property in a Chapter 7 filing.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Which_type_of_bankruptcy_is_right_for_me\"><\/span><span style=\"font-weight: 400;\">Which type of bankruptcy is right for me?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Understanding the difference between bankruptcy types is the first step to take if you\u2019re considering filing for bankruptcy. Choosing which type of bankruptcy is right for you will greatly depend on your situation and what kind of debt relief you\u2019re looking for.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re unsure which bankruptcy type to file for, it\u2019s best to talk to an <\/span><a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/\"><b>experienced bankruptcy attorney<\/b><\/a><span style=\"font-weight: 400;\">. At <\/span><b>Phoenix Fresh Start Bankruptcy Attorneys<\/b><span style=\"font-weight: 400;\">, we can discuss your options with you and help you get back on track to financial success. Call us today to schedule a free consultation!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>For a debtor struggling with debt, declaring bankruptcy can be the debt relief solution you\u2019re looking for. But before you can start filing bankruptcy, it\u2019s important to know the different types of bankruptcy and how these bankruptcy types can address your financial concerns. Read on to learn more about Chapter 7 and Chapter 13 bankruptcies. What\u2019s the difference between personal and business bankruptcy? Before discussing the two types of personal bankruptcy, it\u2019s important to first differentiate it from business bankruptcies. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3524,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3522"}],"collection":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/comments?post=3522"}],"version-history":[{"count":0,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3522\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media\/3524"}],"wp:attachment":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media?parent=3522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/categories?post=3522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/tags?post=3522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}