CHAPTER 7 – LIQUIDATION
A Chapter 7 or liquidation bankruptcy procedure is the most common type of bankruptcy action filed by individuals. This procedure allows individuals to discharge all debts, except debts for income taxes, alimony, child support, student loans and several others. Discharge of debt in bankruptcy proceedings means that you are no longer obligated to pay the debt, and the individual or business to whom the debt is owed may no longer attempt to collect the debt from you.
Need more information about Chapter 7 Bankruptcy? See our Chapter 7 Bankruptcy FAQs here.
CHAPTER 13 – WAGE EARNER
A Chapter 13 bankruptcy is also called a wage earner’s plan. This procedure allows you to reduce the number of monthly payments you pay to your creditors by presenting a plan to the bankruptcy court and scheduling a single payment made to the bankruptcy court trustee each month over a period of three to five years. From your monthly payment, the bankruptcy trustee pays your creditor.
This procedure also stops a mortgage foreclosure action and allows you to bring the mortgage current over a period of three to five years.
Need more information about Chapter 13 Bankruptcy? See our Chapter 13 Bankruptcy FAQs here.
CHAPTER 11 – REORGANIZATION
A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. An individual or business may elect a reorganization proceeding in which the bankruptcy court presents a plan for approval for payment of all or a portion of the outstanding debts over a period of time; the amount of the payments may differ from the original payment terms with creditors.
CHAPTER 12 – FAMILY FARM REORGANIZATION
Chapter 12 is designed for “family farmers” or “family fishermen” with “regular annual income.” For certain types of family farm operations, a special bankruptcy procedure is available which allows the continuation of regular farming operations while a restructuring plan is submitted to the bankruptcy court.