What are the different types of bankruptcy?

There are several types of bankruptcy available under United States law, primarily designed to help individuals and businesses address their financial challenges. The two most common forms for individuals are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, allows individuals to discharge most unsecured debts, such as credit card debts and medical bills, without the need for a repayment plan. However, individuals may also have to surrender certain non-exempt assets in order to pay off creditors. This type of bankruptcy provides a fresh start for those who meet the income requirements set by the means test. Chapter 13 bankruptcy, on the other hand, is known as reorganization bankruptcy. It allows individuals to create a repayment plan to pay back a portion of their debts over a period of three to five years. This form of bankruptcy can be particularly beneficial for those who want to keep their assets, such as a home or automobile, while managing their debts in a structured manner. Individuals must have a regular income to qualify for Chapter 13, which provides more flexibility in terms of debt repayment. For businesses, Chapter 11 bankruptcy is a popular option. This allows companies to reorganize their debts while continuing to operate. Under this chapter, businesses can restructure their debts through a court-approved plan, providing a pathway to financial recovery without immediate liquidation. Lastly, there is Chapter 12, specifically designed for family farmers and fishermen, offering them a way to reorganize their debts while continuing their agricultural or fishing operations. Each type of bankruptcy comes with its own set of eligibility requirements and processes, so individuals and businesses should carefully evaluate their financial situations to determine which option best suits their needs. For specific inquiries about SunTrust Bankruptcy options or services, it might be helpful to visit their official website or contact them directly for more information.