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BANKRUPTCY ATTORNEYS!
FAQs ABOUT BANKRUPTCY
What are the differences between Chapter 7, 11, and 13 Bankruptcy?
The different chapters of bankruptcy refer to portions of the U.S. Bankruptcy code.
Chapter 7 bankruptcy is often referred to as "liquidation." Liquidation involves
selling property that is not exempt from sale so that the proceeds can be distributed
among those the debtor (the person or entity filing bankruptcy) owes (their creditors).
Chapter 11 bankruptcy is usually used by business entities like corporations or
partnerships to allow for reorganization so that a debtor (the person or entity
filing bankruptcy) can keep going and pay those that it owes (its creditors). For
that reason, chapter 11 bankruptcy is called "reorganization" bankruptcy.
Chapter 13 bankruptcy is usually used by individuals to allow the debtor (the person
filing bankruptcy) to keep their property and enter a payment plan for a set period
of time to satisfy debts owed to creditors. Because of the repayment plan and the
income requirements that necessitate chapter 13 bankruptcy, it is called a "wage
earner's plan" bankruptcy.
Further questions and answers under construction.