Alternative Bankruptcy Options For Repairing Your Finances

6 July 2015
 Categories: , Blog


When you research bankruptcy options, you may find that Chapter 7 and 13 do not offer you much help. When your situation is different, you need to be aware of the alternative bankruptcy options that could help you repair your financial problems.

Chapter 12

When you operate a family farm or family fishing business and more than 50 percent of your income comes from this business, it is best to file for Chapter 12 bankruptcy. This option is designed to help you protect your personal property and business, while you take the opportunity to repair your finances.

When considering this bankruptcy option, you need to be aware of how much of your debt must come from operating your business. For farmers, 50 percent of the debt must be due to operational costs of the farm, while fishermen need the debt amount to be at 80 percent. The percentage does not include the amount you owe for your home mortgage.

When filing Chapter 12, you have the opportunity to continue operating your business and repay some of your debt off at the same time. The idea is to create a repayment plan through the courts that will normally last three to five years.

Usually, the payment plan is for three years, but you can petition the courts to extend it to five years to help lessen the financial strain. On the other hand, if you owe child support or alimony, the courts will generally make the repayment period five years to start with, so you have adequate time to pay your debt in full.

Chapter 15

If you owe money to creditor in two or more countries, you can find the process of filing for bankruptcy a lot harder to complete. For those living in the United States, you have one option, which is filing for Chapter 15 bankruptcy.

With this method, the U.S. courts work with financial institutions in the other countries to help settle your debt. One downside is that this process does take additional time to complete, because each creditor has a right to object to or approve any terms you and your lawyer ask for during the bankruptcy process.

In many cases, the U.S. court system and the representative from the other countries can come to some type of agreement, so you can pay off your debt. It is best to locate a lawyer that specializes in Chapter 15 bankruptcy, because the lawyer needs to understand international banking laws and credit practices of other countries.

For more information, contact Flippin Thomas C or a similar legal professional.