Connecticut is not immune to economic downswings from time to time, just as most other states in the nation have experienced. When an individual resident or a business owner comes upon difficult financial times, it may be challenging to figure out the most viable option to rectify the problem. What works in one set of circumstances may not even be possible in another; for instance, some people are not eligible for Chapter 7 bankruptcy while others are.
There are several types of bankruptcy, and one or more may be feasible in a particular situation. Most individuals filing for personal bankruptcy choose Chapter 7 or Chapter 13. The latter includes a reorganization of debt plan and a restructuring of payments. The key factor here is that the person filing for debt relief with this type of option retains his or her own assets.
Chapter 7, on the other hand, involves a complete liquidation of assets. There are some cases where businesses choose the option as well; however, they go into it knowing they will no longer be business owners at the end of the process. Most businesses can not use Chapter 13; therefore, another option, Chapter 11, is most common for corporations and partnerships.
There are certain debts that can not be discharged through bankruptcy. These would include things like student loans, real estate liens or taxes. Creditors to whom debts are owed are able to dispute the discharging of the debts owed them. If they succeed, the debtor would still be responsible for the debt even if bankruptcy is filed. Anyone in Connecticut who is confused about the differences between Chapter 7 and other types of bankruptcies can seek clarification by meeting with an experienced debt relief attorney.
Source: Forbes, "Filing For Bankruptcy: 3 Most Important Things You Need To Know", Larry Myler, Oct. 3, 2017