Chapters of the U.S. Bankruptcy Code

There are four main chapters—or types—of bankruptcy filings within the U.S. Bankruptcy Code:

  1. Chapter 7 Bankruptcy
    1. This form of bankruptcy allows individuals, married couples, and companies to discharge their debts after liquidating some of their assets to repay creditors.
  2. Chapter 11 Bankruptcy
    1. 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.
  3. Chapter 12 Bankruptcy
    1. Family farmers and fishermen earning regular incomes can reorganize their debts into a payment plan by filing for Chapter 12 bankruptcy.
  4. Chapter 13 Bankruptcy
    1. 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.

Read more about the Bankruptcy Process here