Chapters of the U.S. Bankruptcy Code
There are four main chapters—or types—of bankruptcy filings within the U.S. Bankruptcy Code:
- Chapter 7 Bankruptcy
- This form of bankruptcy allows individuals, married couples, and companies to discharge their debts after liquidating some of their assets to repay creditors.
- Chapter 11 Bankruptcy
- Mostly used by large businesses, this form of bankruptcy now allows individuals to reorganize their debts into court-ordered payment plans with no restriction on how much these individuals or companies owe creditors.
- Chapter 12 Bankruptcy
- Family farmers and fishermen earning regular incomes can reorganize their debts into a payment plan by filing for Chapter 12 bankruptcy.
- Chapter 13 Bankruptcy
- Chapter 13 bankruptcy allows individuals or married couples earning regular incomes to restructure their debts into three- to five-year, court-ordered payment plans. You must have less than $360,475 in unsecured debt and less than $1,081,400 in secured debt to file under Chapter 13.
Most individuals or couples struggling with debt seek relief by filing under Chapter 7 or Chapter 13. If you have questions about what type of bankruptcy is right for you, enlist the help of a qualified bankruptcy lawyer today.