Are there different types of Chapter 7 Bankruptcy?

Yes, there are different types of Chapter 7 Bankruptcy available in Virginia. The most common type of Chapter 7 Bankruptcy is known as a "straight bankruptcy." This type of bankruptcy allows a debtor to discharge all or some of their debt. A straight bankruptcy is ideal for those who have a significant amount of debt and few assets. Most unsecured debts, such as credit card debt or medical bills, can be eliminated under this type of bankruptcy. Another type of bankruptcy is the “liquidation trust”. This type of bankruptcy is used when a debtor has significant assets that they would like to keep. Under this type of bankruptcy, a trustee is assigned to take control of the debtor’s assets and administer them for the benefit of the creditors. This usually involves selling off some of the debtor’s assets in order to pay off creditors. Finally, there is Chapter 7 Bankruptcy for businesses. This type of bankruptcy allows business owners to eliminate their debt while keeping their business operating. This type of bankruptcy is ideal for businesses that are struggling financially and need to restructure their debt. No matter what type of bankruptcy a debtor chooses, they will need to meet certain criteria in order to qualify. This includes taking a credit counseling course and providing the court with all financial documents. Once these requirements are met, the court can decide if bankruptcy is the best option for the debtor.

Related FAQs

Are there different types of Chapter 7 Bankruptcy?

Related FAQs

Related Blog Posts