Types of Bankruptcy

• Most consumers file either a Chapter 7 or a Chapter 13 bankruptcy, while specific businesses can choose from Chapter 9, 11 or 12. Chapter 7 bankruptcy discharges most debts, but the court may liquidate the consumer's nonexempt property to cover his debt to the creditors. Chapter 13 bankruptcy restructures all of the consumer's debt so it can be paid over a several-year period. Chapter 9 bankruptcy covers municipalities declaring bankruptcy, Chapter 12 is for family farmers or fishermen and Chapter 11 covers general business restructurings.
  
  

Bankruptcy Process

• The individual or business needs to assemble a collection of financial documents to show a complete picture of finances. Examples of the financial documentation needed includes a full list of creditors, the balances for credit accounts, list of income sources and assets. The court may require additional documentation depending on the type of bankruptcy. The bankruptcy court may schedule several creditor meetings to get a payment or discharge agreement worked out. If the individual or business is in a repayment plan, the terms of the plan are established.
  
  

Filing Another Bankruptcy

• Your ability to file a second bankruptcy depends on the type of bankruptcy that you filed, whether you are done with a payment plan, and how long it has been since your first bankruptcy. If you want to file consecutive Chapter 7 bankruptcies, you need to wait eight years. A Chapter 13 bankruptcy requires only a two-year wait. If you file Chapter 7 bankruptcy following a Chapter 13 bankruptcy, you need to wait four years. If you want to file a Chapter 13 bankruptcy after a Chapter 7 bankruptcy, you need to wait six years.
  
  

Bankruptcy Discharge

• A bankruptcy is considered discharged once the debt liability is released, or a payment plan is completed. The discharge for a bankruptcy that releases a debtor from all of his debt liability usually occurs several months after the bankruptcy filing. Otherwise, the bankruptcy is considered discharged once the debts have all been paid in full as negotiated.
  
  

Filing After Dismissal

• If your bankruptcy is dismissed from bankruptcy courts, you are held liable for all debts you were attempting to include in the bankruptcy. The automatic stay on collection is lifted, so the creditors can come after you on an individual basis. Dismissal occurs due to improper bankruptcy filing, voluntary dismissal and suspected or confirmed fraud. You can refile your bankruptcy case after a dismissal, but you need to wait 180 days under two circumstances. If you do not appear in court or obey the court's orders, or if you requested a dismissal specifically.