Types of Bankruptcy
The four types of bankruptcy available to individuals and businesses in Kansas are:
Chapter 7 bankruptcy is commonly referred to as a liquidation bankruptcy. The bankruptcy trustee assigned to your case can sell property you own to repay your creditors. However, it is likely that most of the property you own, such as your residence, vehicle, household goods and furnishings, qualified retirement accounts, etc., is protected by Kansas law and cannot be taken by the trustee. In many cases, debts are discharged without any payment to creditors. The Chapter 7 process usually results in a discharge in approximately 4 months; although, the case may stay open longer to allow for collection and distribution of assets.
Chapter 13 bankruptcy is commonly referred to as a reorganization or a wage-earner’s plan. A Chapter 13 debtor makes monthly payments to the bankruptcy trustee for a minimum of 3 years and a maximum of 5 years. However, do not confuse this with a repayment plan because very few cases pay all of the debts in full. Chapter 13 is a tool that can catch up on mortgage payments, pay tax debt or child support that will not be discharged, and pay off car loans at a discounted rate of interest.
Chapter 12 cases are reserved for family farmers with regular annual income. To be considered a family farmer, at least 50% of income must come from farming. The reorganization process is similar to that of Chapter 13, but allows more flexibility in making payments and additional benefits.
Chapter 11 cases usually involve a business reorganization where the business continues to operate during the bankruptcy and pay creditors over time. Chapter 11 cases can be especially complex given the additional reporting requirements assigned to the debtor.
Our highly-rated attorneys will advise you on the type of bankruptcy best for your financial situation and goals. We offer Free Consultations for Chapter 7 and Chapter 13 clients.