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As you consider filing bankruptcy, you must understand the differences between the types of bankruptcy in South Carolina before submitting any paperwork. These types – called “chapters” – include:
- Chapter 7
- Chapter 13
- Chapter 12
- Chapter 11
Some people may qualify for only one type of bankruptcy, while others may be eligible for several. A bankruptcy lawyer from our firm can examine your situation and determine which type of bankruptcy best serves your needs.
Bankruptcy for Individuals
If you plan to file as an individual or jointly with your spouse, you may qualify for the following types of bankruptcy:
- Chapter 7
- Chapter 12
- Chapter 13
Of these, Chapter 7 is often the most advantageous—it allows most petitioners to keep all their assets and discharge applicable debt. However, if you still earn a steady income over a certain amount, you may not qualify to file under Chapter 7.
Repaying Debts
Chapter 7 is the only bankruptcy chapter that does not require petitioners to submit and adhere to a repayment plan. All others require you to:
- Specify how much of your debt you plan to repay
- How long it will take you to repay that amount (each chapter has its time limits)
- State how often you will make payments and in what amounts
- Get approval from your creditors and the court to implement your plan
A bankruptcy attorney can help you with all stages of bankruptcy proceedings, including:
- Creating a viable repayment plan
- Collecting all necessary paperwork
- Helping you determine which chapter would be most beneficial to you.
Bankruptcy for Businesses
Businesses may file bankruptcy under:
- Chapter 7
- Chapter 11
- Chapter 13 (self-employed individuals)
The size of your business may dictate which chapter you file. For example, medium and large businesses often use Chapter 11.
As a business, you have many of the same bankruptcy responsibilities as an individual would, including:
- Paying filing fees
- Coming up with a repayment plan (except under Chapter 7)
- Obeying all filing rules, including meeting deadlines
- Submitting extensive paperwork regarding your financial history
Due to the complexity of these responsibilities, businesses can benefit from professional legal advice just as much as individuals can.
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Bankruptcy for Farmers or Fishermen
If you are a family farmer or fisher, you may be able to file under:
- Chapter 7
- Chapter 12
- Chapter 13
Chapter 12 is a special type of bankruptcy reserved only for farmers or fishermen. It involves fewer fees and less paperwork and offers additional legal tools not available in other chapters.
You can always file for another type of bankruptcy if you wish. For example, Chapter 13 affords individuals and businesses with a steady income and relatively debt levels additional time to pay what they owe. However, those with a great deal of debt might be better off filing under another chapter.
Can I Change My Filing?
You might file for one type of bankruptcy and later decide that another chapter would serve your interests better. In addition, you might find that changing circumstances affect your eligibility partway through the proceedings. In either situation, you could change your filing. A bankruptcy attorney can walk you through this process if necessary.
That said, your bankruptcy filing will typically be faster and less stressful if you choose the right chapter the first time. To increase your chances of a smooth bankruptcy process, you can hire a lawyer to:
- Review your situation and determine which chapter is right for you
- File your petition with the appropriate court
- Help you collect paperwork regarding your finances
- Represent you in court or meetings with your creditors
- Craft a repayment plan and present it to your creditors
Is Bankruptcy My Only Option?
Bankruptcy should never be a person’s only consideration when handling financial difficulties. Bankruptcy is a drastic step with potentially long-term, adverse “side effects.”
Before you seriously consider bankruptcy, you might benefit from trying the following options.
- Waiting to see if your financial situation improves in the near future
- Debt counseling services from an accredited, respected institution
- Asking your creditors to renegotiate the terms of your loan, giving you more time to pay it back
For true security and peace of mind, you can consult a lawyer about your financial situation. They can explain more about bankruptcy alternatives and determine if bankruptcy is your only remaining option for dealing with debt.
Get a Free Consultation Now
To find out more about the types of bankruptcy available in South Carolina, call Farmer & Morris Law, PLLC, today at (828) 286-3866. We offer free evaluations to potential bankruptcy clients. This way, you can learn about your options at no cost or obligation.
