Are there different kinds of bankruptcy?

Yes, there are different types of bankruptcy under federal law. In Iowa, the most commonly used type of bankruptcy is Chapter 7 bankruptcy. This type of bankruptcy is also known as a “straight bankruptcy” and is the quickest and most efficient way to discharge unsecured debts, such as credit card debt and medical bills. Under Chapter 7, all assets are sold and the proceeds are used to repay creditors. The remaining debt is discharged, or eliminated. Chapter 13 bankruptcy is also available in Iowa. This type of bankruptcy is best for those who have steady income and want to keep their assets. Under Chapter 13 bankruptcy, debtors create a repayment plan to pay off a portion of their debts. As long as they make their payments, the creditors cannot take any action against the debtor. In addition to Chapter 7 and Chapter 13 bankruptcy, individuals can also file for Chapter 11 or Chapter 12 bankruptcy. Chapter 11 bankruptcy is typically used by businesses, while Chapter 12 is reserved for those involved in farming or fishing. Both types of bankruptcy involve reorganizing the debtors’ finances and allowing them to pay back their creditors over a set period of time. No matter which type of bankruptcy you choose, it is important to consult a qualified attorney to ensure that your rights are protected and that you have the best chance of a successful discharge. A qualified attorney can help you understand the bankruptcy process and the various types of bankruptcy available in Iowa.

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