Debtor FAQ's
What are the different types of bankruptcy?
There are four different types of bankruptcy: Chapters 7 and 13
(the most common), and Chapters 11 and 12.
- Chapter 7: A liquidation-style case for individuals or
businesses. This is sometimes referred to as straight bankruptcy.
- Chapter 13: This is a payment plan, or
rehabilitation-style case for individuals with a regular source of
income. In this case, a debtor retains his assets, but repays
creditors all or part of what is owed over a period of three to
five years. This is sometimes referred to as a wage-earner or
debt-adjustment plan.
- Chapter 11: This is a more complex,
rehabilitation-style case used primarily by business debtors, but
sometimes by individuals with substantial debts and assets.
- Chapter 12: This is a payment or rehabilitation-style
plan for family farmers and fishermen.
Back to Bankruptcy FAQ’s |
