Types Of Bankruptcy
There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:
Chapter 7: basic liquidation for individuals and businesses; also known as straight bankruptcy;
it is the simplest and quickest form of bankruptcy available, to help you eliminate your debt.
Chapter 9: municipal bankruptcy; a federal mechanism for the resolution of municipal debts.
Chapter 11: rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets; known as corporate bankruptcy, it is a form of corporate financial reorganization which typically allows companies to continue to function while they follow debt repayment plans.
Chapter 12: rehabilitation for family farmers and fishermen.
Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; enables individuals with regular income to develop a plan to repay all or part of their debts; also known as Wage Earner Bankruptcy.
Chapter 15: ancillary and other international cases; provides a mechanism for dealing with bankruptcy debtors and helps foreign debtors to clear debts.
The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13.
As much as 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases.
Corporations and other business forms file under Chapters 7 or 11.