The type of bankruptcy filing that is correct for you is not a decision to be taken lightly. Many elements of the bankruptcy process are unchangeable once decided. Qualified legal advice following a thorough financial assessment is decidedly the best path to follow. With that said, the three main types of bankruptcy are briefly outlined here. A video describing elements of different types of bankruptcy produced by the US Court System is provided here for your review, as well.
Chapter 7 Bankruptcy
Broadly stated, Chapter 7 is a liquidation bankruptcy that eliminates many of your debts, while allowing you to keep most, if not all, of your personal property. The process is faster than you might think. Once it’s started, Chapter 7 is administrative in nature. The requirements on your time after filing are quite minimal.
Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, your debts and back payments are reorganized in a manner where you can pay them from disposable income over a period of time. Chapter 13 delivers a repayment plan that will describe in detail how your debts and delinquent payments will be paid, and which debts, if any, will be discharged.
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy is mostly designed to help businesses reorganize their debt. Some individuals who do not qualify for Chapter 13 reorganization may fall into the Chapter 11 category. The law mandatorily requires a corporation to obtain legal counsel to represent them in the bankruptcy and restructuring process.