When an individual or business in Michigan starts looking into bankruptcy, it will quickly become apparent that there are many types. These types are labeled under “Chapters” and indicate the process that will be undertaken in addressing creditors.
The two most common types of personal bankruptcy that one will typically encounter are:
- Chapter 7: This tends to be the quickest bankruptcy process. It involves selling off non-exempt property to pay back creditors, then having some debts discharged after this is complete.
- Chapter 13: This allows a debtor to put together a plan to pay down their debts. This means they may not have to sell off as many assets, but the process is longer.
Other bankruptcy types include:Chapter 9: A type of bankruptcy that protects the assets of municipal bodies, like cities and schools.
- Chapter 11: Allows a business to continue operations while undergoing a reorganization process, as well as liquidating some assets.
- Chapter 12: This bankruptcy type exists for those who hope to protect their family farm or fishing business.
- Chapter 15: International cases with insolvency across borders may need to investigate this bankruptcy type, which is newer to the books.
Those who are considering bankruptcy are not alone. Bankruptcy filings in 2021 numbered 413,616 across the United States. Those looking to file for bankruptcy can start the process by speaking with a Michigan bankruptcy lawyer.
