A list was recently published of all of the bankruptcy cases that were filed in Lancaster County. The list looks at the filings in the U.S. Bankruptcy Court, which is located in the Eastern District of Pennsylvania in the town of Reading. It also further sorts the cases by only considering those that are from May 13th to May 19th.
There were 11 total cases that were filed in the court. Of those 11, there were 10 cases that revolved around Chapter 7 bankruptcy. The other case was considered Chapter 13 bankruptcy.
U.S. Bankruptcy Code addresses a Chapter 7 filing by saying that the assets that the person or businesses has will need to be sold off and liquidated. The money that is gained through this process can be used to pay the creditors. With a Chapter 11 bankruptcy filing, the person or company needs to set up a plan for reorganization, and this can often go along with paying off some of the debt. With a Chapter 13 bankruptcy filing, the person who is filing gets to enter a proposal for a plan to pay off the debt.
The type of bankruptcy that is addressed in the filing has a huge impact on how things proceed after the case is settled. For this reason, it is crucial that anyone who wants to file for bankruptcy as a way to get out of debt knows exactly what they are really filing for in a legal sense. They must select the type that best fits their situation and the plans that they have going forward. As this list shows, Chapter 7 is a popular choice, but it might not be right for everyone.
Source: Lancaster Online, "Bankruptcies: May 25, 2014" No author given, May. 21, 2014