Augusta GA Bankruptcy Lawyer – Bankruptcy Types

Augusta GA Bankruptcy Lawyer – Bankruptcy Types

Companies that go out of business or try to recover from crippling debt are governed by federal bankruptcy laws. A company can use either Chapter 7 or Chapter 11 of the Bankruptcy Code. To qualify for relief under Chapter 7 of the Bankruptcy Code, the debtor must be an individual, a partnership, or a corporation. Under Chapter 7, sometimes known as liquidation, a bankruptcy trustee gathers and sells the debtor’s nonexempt assets, and uses the proceeds to pay the creditors. The debtor gets to keep the exempt assets. As a general rule, individual debtors receive a discharge in more than 99 percent of Chapter 7 cases. Chapter 11 is most commonly used by medium-sized and large corporations. Chapter 11 is also known as bankruptcy reorganization. Chapter 11 does not necessarily involve selling off assets. Rather, the debtor business continues operation and goes through a structural and financial reorganization designed to regain profitability. Chapter 11 can involve restructuring business debts with creditors, selling off assets to streamline the corporation, and other changes. Chapter 12 bankruptcy is another bankruptcy plan. It is almost identical to Chapter 13 bankruptcy. The main difference is that to be eligible for Chapter 12 bankruptcy, at least 80% of your debts must arise from the operation of a family farm. Chapter 12 has higher debt ceilings to accommodate the large debts that may come with operating a farm, and it offers the debtor more power to eliminate certain types of liens.
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We are Augusta GA bankruptcy lawyers and bankruptcy attorneys in Augusta – Evans Georgia that assist their clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.