Bankruptcy

What is a Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. Within 4 to 5 months after filing a Chapter 7 bankruptcy, the debtor receives a discharge (i.e., a "wiping out") of all dischargeable debts.

Who may file Chapter 7?
Almost any individual, partnership, corporation or Arkansas business trust may file a chapter 7 bankruptcy petition if he or she resides, has a domicile, a place of business, or property in the United States, or a municipality. You can file a Chapter 7 bankruptcy petition regardless of whether or not you are employed.

What is a Chapter 13 bankruptcy?
Chapter 13 is a reorganization of debt. The debtor pays back creditors through a monthly "plan" payment handled by the bankruptcy trustee. Generally, the duration of the plan ranges from 3 to 5 years.

Who may file Chapter 13?
Individuals may file chapter 13 bankruptcy petitions in Arkansas if they reside, have a domicile, a place of business, or property in the United States, or a municipality; have a source of regular income; and on the date the petition is filed owe less than $250,000 in noncontingent, liquidated, unsecured debts and less than $750,000 in noncontingent, liquidated, secured debts. Corporations and partnerships may not file a chapter 13 bankruptcy petition.