Chapter 11 & 12 Bankruptcies: Are They For You?
Even though your bankruptcy case will most likely fall under a Chapter 7 or 13 rubric, there are a couple of other options. So, before you make up your mind to file under one of these, you should know about all alternatives and understand when filing under Chapter 11 or 12 may be right for you.
Chapter 11 For Large Reorganizations
If you don't qualify for Chapter 13, but have a great deal of assets that you want to continue to control, ask your bankruptcy attorney about Chapter 11. Most people who file Chapter 11 are business owners who need to reorganize their debt. These proceedings can be very complicated and expensive, but even if you are not a business owner, this is something to consider if you have a lot of assets.
Not all bankruptcy lawyers have experience with Chapter 11 bankruptcy cases, as it is a specialty in its own right. If you decide to file this type of bankruptcy, make sure you hire a lawyer that has experience working with Chapter 11 cases.
Chapter 12 For Family Farmers And Fishermen
Chapter 12 bankruptcy is meant for family farmers and fishermen. Congress recognizes that those occupations play a unique role in U.S. culture and economy, so they deserve special treatment.
If you qualify for Chapter 12, it provides most of the benefits for Chapter 13, but also provides more. Under Chapter 12, you are not restricted to five years for repayment plans, and you have fewer limitations on your ability to restructure home mortgages. However, there is a downside, the dischargeable debts are limited to the dischargeable debts of Chapter 7 bankruptcy. This means you don't benefit from the same discharges as you would if you file Chapter 13.
You must also qualify as a farmer or a fisherman. Requirements for a farmer include the following:
- Fifty percent of your total debts, excluding your mortgage, must be from farming operations
- Half of your income from the previous year, or from the each of the two years before that, must have come from farming
Requirements to qualify as a fisherman include the following:
- Eighty percent of your debts, excluding the home mortgage, must come from commercial fishing operations
- Fifty percent of your income from the previous year must have come from your commercial fishing operation
There are also certain monetary limits on how much debt you can have, so you need to discuss this option with a bankruptcy attorney who understands Chapter 12 laws.
Bankruptcy is there to help you when you are having financial troubles, but it works best if you know which type best fits your needs. So, make sure to discuss all your options with your bankruptcy attorney. For more information, visit websites like http://wfactorlaw.com.
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