Chapter 7 Versus Chapter 11 Bankruptcy
Bankruptcy Lawyer in Florida: Chapter 7 Versus Chapter 11 Bankruptcy
If you’re in a dire financial situation, bankruptcy may seem like a last resort. This could be a way to solve your money issues and get a fresh start. But is it the right decision to call yourself bankrupt? Which is the best bankruptcy type, and how can you differentiate between Chapter 7 and 11 bankruptcy? Consulting a bankruptcy lawyer in Miami will help you understand the different forms of bankruptcy. Find out more about Chapter 7 and Chapter 11. Also, learn how Arturo R. Alfonso P.A. can help you resolve bankruptcy issues.
Chapter 7 Vs. Chapter 11 Bankruptcy
Let’s take a look at chapter 7 and 11 bankruptcy
Also known as liquidation bankruptcy, Chapter 7 is the most common type of bankruptcy protection for individuals and small businesses. Filing for Chapter 7 bankruptcy involves selling a portion of your property to pay debts.
Chapter 11 is also known as rehabilitation bankruptcy. This form of bankruptcy is used by medium to large-sized businesses, including partnerships and corporations. Unlike Chapter 7, rehabilitation bankruptcy helps restructure debts and creates and implements a plan to offset them.
Differences between Chapter 7 and Chapter 11
Costs: Typically, Chapter 11 bankruptcies are more expensive than Chapter 7 because the former involves businesses. Hiring a Miami bankruptcy lawyer to handle Chapter 11 would cost you more than Chapter 7.
Appointment of Trustees: In Chapter 11 bankruptcy, the trustee appointed works with the debtor to create a repayment plan for outstanding loans. The role of a trustee in Chapter 7 bankruptcy is to oversee the debtor’s assets, sales, and repayment of creditors.
Duration: Usually, it takes 4-6 months to file and complete Chapter 7 bankruptcy. Meanwhile, Chapter 11 bankruptcy may take longer depending on the negotiation plan terms with creditors. Consider checking with a bankruptcy attorney in Miami to know the average length of your bankruptcy case.
Debt Forgiveness: Unlike Chapter 7, debts are not absolved or forgiven in Chapter 11. The debts are restructured to be paid back through future earnings. Chapter 7 bankruptcy involves the liquidation of assets and payment of debts. However, they will be dismissed if you can’t pay the remaining debts.
Which Bankruptcy Type is Best for You?
Contact a Bankruptcy Lawyer Today
Our bankruptcy attorneys at Arturo R. Alfonso P.A. strive to help clients regain their financial footing after unforeseen circumstances. Whether you’re looking for a Miami bankruptcy attorney to handle your case or seek answers about bankruptcy types, our team will always be available to meet your needs. Our unrivaled customer service, years of experience, and attention to detail are second to none. Want to know how we can help you? Call us today!
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