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<a href="http://www.thearticlesense.com/article/Understanding-The-Different-Types-Of-Bankruptcy/" target="_blank">Get Paid to Submit Article like "Understanding The Different Types Of Bankruptcy"</a><br /><br />If you are an individual in the US you can apply for two different types of bankruptcy. The first is chapter 7 which can totally eliminate all of the individual's debts. The second is chapter 13; with this option the individual's debts will be paid off during the following five years.<br /> <br /> If you are a business on the other hand, you will have to file under chapter 11. In Chapter 11 the business will be able to reorganize its debts or renegotiate so as to stay in business.<br /> <br /> As an individual you should be able to find out which bankruptcy you can file under with a brief visit to a bankruptcy attorney. With all the new bankruptcy laws there are now a series of tests to determine whether or not an individual can qualify for chapter 7 bankruptcy.<br /> <br /> Basically in the test they will calculate the individuals monthly income, if the individuals income is higher than the average in the state he or she resides in, the individual will definitely not be allowed to file under chapter 7 and he or she will then have to file under chapter 13.<br /> <br /> If an individual is given a green light for chapter 7 bankruptcy, he or she will be able to eliminate all debts including the secured and even unsecured debts. But it is possible that some of the individual's assets will be confiscated and sold off so as to pay off some of the individual's debts.<br /> <br /> Of the two types of bankruptcy, Chapter 7 offers the most financial relief for the creditor.<br /> <br /> Paying your debts off over time<br /> <br /> If the individual cannot qualify for a chapter 7 bankruptcy, they will still be able to file for chapter 13. In doing so they will be obligated to make payments on a monthly basis to a court trustee, who will in turn send out the payments to the individuals different creditors.<br /> <br /> Chapter 13 will allow the individual to honor their financial obligations and at the same time stop creditors from demanding collection actions against the debtor.<br /> <br /> In the past, a lot of people may have started out in Chapter 13 bankruptcy and found they were unable to meet the obligations and so moved into Chapter 7.<br /> <br /> However since 2005 when the all-new bankruptcy laws became law, the only way to qualify for chapter 7 bankruptcy is to come up with a below average monthly income result in the courts means test.<br /> <br /> So basically if an individual has the means as it were, the current income level, to be capable of paying off their debts, they will be restricted whether they like it or not to a chapter 13 bankruptcy.<br /> <br /> Whether you file for chapter 7 or 13, any assets or initial payments will first go to creditors with priority access. Priority access will be granted to but not limited to, student loans, part income taxes and generally most other government obligations you may have.<br /> <br /> As soon as all of your creditors that have qualified for priority access have had all debt paid, the paying of all your unsecured creditors will then start to take place.<br /> <br /> Remember that regardless of the type of bankruptcy you can file under, filing for bankruptcy should always be your last result, since it will stay on your public record for a long time to come!<br>For more info and advise on the <a href="http://www.endbankruptcynow.com/bankruptcy-facts-and-questions/the-different-types-of-bankruptcy-9/">Types Of Bankruptcy</a> come see my resource, there is info on every <a href="http://www.endbankruptcynow.com/">Type Of Bankruptcy</a>.