What is Bankruptcy?

Bankruptcy is a legal process that allows individuals or businesses to reorganize or eliminate their debts when they are unable to pay them. There are several types of bankruptcy, including Chapter 7, Chapter 11, and Chapter 13.

How to File for Bankruptcy

To file for bankruptcy, you will need to meet the eligibility requirements, which typically include living within the United States, being a U.S. citizen or resident alien, and having no property worth more than $524,100 (or $1,081,500 in some states). You must also be unable to pay your debts through another means, such as credit counseling or wage garnishment.

• You will need to file Form 1120 bankruptcy forms with the U.S. Bankruptcy Court for the district where you reside.
• You may need to attend a credit counseling course approved by the U.S. Trustee Program before filing for bankruptcy.

Types of Bankruptcy

There are several types of bankruptcy, each with its own set of eligibility requirements and purposes:

• Chapter 7: Liquidation bankruptcy
• Chapter 11: Reorganization bankruptcy
• Chapter 13: Repayment bankruptcy
• Chapter 12: Family farm or business bankruptcy