What Different Types of Bankruptcy Should I Consider?
There are four types of bankruptcy cases provided under the law:
Chapter 7 is the most common form of bankruptcy since it is the cheapest, quickest and easiest chapter. Chapter 7 is sometimes called “liquidation” bankruptcy. It requires a debtor to give up property that exceeds certain limits called “exemptions”, so the property can be sold to pay creditors. However, the vast majority of clients do not have to give up any property.
Chapter 11 is used by businesses and a few individual debtors whose debts are very large.
Chapter 12 is reserved for family farmers.
Chapter 13 is sometimes called “reorganization” or “debt consolidation”. It requires a debtor to file a plan to pay part or all debts from current income. Chapter 13 is popular for consumers who are behind on home or car payments and want to save the car or home. Chapter 13 is also a popular option for clients who do not qualify for Chapter 7 because they did not pass the means test.
This website does not create an attorney-client relationship. The information on this website does not constitute legal advice. You are urged to obtain the advice of an experienced bankruptcy attorney regarding your personal situation.