Types of Bankruptcy

There are three types of bankruptcy, Chapter 7, Chapter 11 and Chapter 13 which are part of Federal law. Bankruptcy is filed with the federal court, not state court. The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy a debtor's debts are discharge and he/she has no obligation to repay them. In most Chapter 7 bankruptcy cases all of the debtor's property is exempt. If there is non-exempt property it will be sold and the proceeds used to repay creditors. Chapter 13 bankruptcy, which is most often used by those who want to keep a house, car or other assets, the debtor repays all or part of their debts over a period of 3 - 5 years. Chapter 11 bankruptcy is used by businesses and individuals who do not qualify for a Chapter 13 bankruptcy because their debts exceed the limit.

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• types of bankruptcy
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