Is Personal Bankruptcy a Form of Consumer Bankruptcy?

Types of bankruptcies are often discussed in terms of consumer and business or corporate bankruptcy proceedings. At the same time, many bankruptcy filings are also described as “personal” bankruptcy filings. Is personal bankruptcy a form of consumer bankruptcy, or is it something distinct? In short, personal bankruptcy is another term that is often used to refer to a bankruptcy case filed by a consumer debtor. Our bankruptcy lawyers in South Florida can explain in more detail, and we can speak with you today about your case.

What is Personal Bankruptcy for Consumer Debt?

Personal bankruptcies are cases filed in federal bankruptcy courts in which debtors seek relief from debts that they are struggling to repay. The form that debt relief takes will depend on the type of bankruptcy filed, and there are two common types of personal bankruptcy filings made up of primarily consumer debt:

• Chapter 7 bankruptcy, which is a type of liquidation bankruptcy that requires the liquidation of non-exempt assets and after which the debtor can have eligible debts discharged to get a fresh start financially in about four to six months; and
• Chapter 13 bankruptcy, which is a type of reorganization bankruptcy that does not require the liquidation of any assets but instead involves a repayment plan that lasts three to five years, requires that certain debtors be paid in full, and allows other debts to be discharged at the end of the bankruptcy case.

What If I Have Business Debts?

While the types of personal bankruptcy cases above typically involve just consumer debts, individuals who are sole proprietors of a business can also include their business debts since there is no distinction between the owner and the business entity.

Other types of business debt, such as debts owed by partnerships, limited liability companies (LLCs), or corporations, are entities that are legally separate from the owners. The business itself can file a business or corporate bankruptcy for business debt, while an individual owner can file bankruptcy in relation to their personal, consumer debt.

What If I Want to File Jointly with My Spouse? 

Personal bankruptcy cases are also sometimes described as “individual” bankruptcies. With this in mind, you may be wondering if you can file jointly with a spouse. An “individual” and “personal” bankruptcy refer to the same thing, and the US Bankruptcy Code allows married couples to file a single, joint bankruptcy petition. Under Florida law, many exemptions can also be doubled when a petition is filed jointly by two spouses.

Contact Our West Palm Beach Bankruptcy Attorneys to Learn More About a Personal Bankruptcy Filing in South Florida

When you are considering bankruptcy as an individual, or in a joint filing with a spouse, you will be considering a personal bankruptcy. As we discussed above, within the umbrella label of personal bankruptcy, debtors can file for Chapter 13 or Chapter 7 bankruptcy depending on eligibility, and in some cases Chapter 11 filings are also personal bankruptcy filings. Whether you have questions about the type of bankruptcy that is right for you, or you are ready to begin working on your bankruptcy petition, an experienced West Palm Beach bankruptcy lawyer at Kelley Kaplan Delaney & Eller, PLLC can assist you. Contact our firm today to start working with our firm on your South Florida bankruptcy case.

Source:

law.cornell.edu/uscode/text/11