The laws regarding bankruptcy have changed recently, but there are still options available to you if your debt has grown out of control and you have found yourself unable to repay them. Bankruptcy laws give debtors a way to divide their assets among creditors and completely eliminate some debts after the assets have been distributed.
Due to the recent changes, you may have to undergo credit counseling prior to filing bankruptcy, but as a debtor you are entitled to file bankruptcy as a way to reorganize or eliminate your debts.
People wanting to completely eliminate all outstanding debts generally use Chapter 7 bankruptcies. Business can also file Chapter 7 if they plan to liquidate all assets and close permanently. Under a Chapter 7 bankruptcy, an individual may keep certain property such as a home, automobile, tools of trade, and various other properties.
Some property however, may be lost during the bankruptcy proceedings. A trustee will control the debtor's assets during the bankruptcy process and those assets will be divided among creditors as the trustee sees fit. Upon discharge of the bankruptcy, the control of any remaining property is returned to the debtor and all outstanding debts that have not been reaffirmed will be gone.
Chapter 13 bankruptcy is for those who wish to pay all their outstanding debts but have found themselves unable to do so. Chapter 13 allows individuals to reorganize debts and structure payments differently so that the debtor can afford to make payments over time.
In the case of a business wanting to reorganize, Chapter 11 bankruptcy is the appropriate choice. Filing bankruptcy is a way out of debt for many people and businesses. Consult with a professional to make sure that bankruptcy would be the best choice for you before you make any final decisions.