What are the different types of bankruptcy?
- Chapter 7. A debtor’s non-exempt assets are liquidated and many unsecured debts are discharged. Chapter 7 is sometimes referred to as straight bankruptcy.
- Chapter 13. A debtor retains his or her assets but proposes a payment plan through which creditors are paid part or all of what is owed over a period of 6-60 months. Chapter 13 is sometimes referred to as a wage-earner plan or debt-adjustment plan. A chapter 13 debtor must have a regular source of income, unsecured debts of less than $383,175.00, secured debts of less than $1,149,525.00 and an ability to set out a budget where he or she can realistically afford a monthly payment plan to a trustee.
- Chapter 11. Generally utilized for corporate reorganization or for individual reorganizations where the debtor is over the chapter 13 debt limits.
- Chapter 12. Family farmer reorganization.