Personal Bankruptcy for Individual Debtors in Pompano Beach
Liquidation vs. Reorganization - Which is best for me?
If you are seeking a fresh financial start, you have several bankruptcy options available to you. These many options may at first seem overwhelming. However, all bankruptcy options can be boiled down to two debt relief methods: Liquidation and Reorganization.
Each of these options has their own benefits and drawbacks. An experienced bankruptcy attorney can best help you identify the right type of bankruptcy to file to effectively discharge your debts.
What is Liquidation Bankruptcy?
A liquidation is the sale of the debtor’s assets and the use of the proceeds of that sale to issue disbursements to the creditors that are owed money by the debtor. In certain cases, the debtor will be able to retain assets that are exempt under the law.
There are several bankruptcy chapters that utilize liquidation, the most common of which is Chapter 7. You should consult bankruptcy attorney prior to filing a liquidation bankruptcy. This type of bankruptcy can lead to the forced sale of assets as well as claims being brought by a private trustee.
The professionals at Bilu Law, P.A. are here to advise you on potential liquidation options. We can help determine your exempt assets and guide you through this process.
What is Reorganization Bankruptcy?
A reorganization is a bankruptcy where the debtor proposes a plan to repay creditors. This repayment plan may offer to pay creditors a fraction of their claims against the debtor. It may also permit the extension of payments over a certain period of time to allow the debtor to better control their financial situation.
Importantly, a reorganization will avoid liquidation of the debtor’s assets to repay debts as long as the court can confirm the debtor’s proposed repayment plan. Such forms of bankruptcy can be effective forsaving a home from foreclosure.
Several bankruptcy chapters use reorganization, such as Chapter 13. A bankruptcy lawyer can help you develop your repayment plan and file under the right chapter to handle your debts.