There are six types of bankruptcy case in the bankruptcy code. The type of case is referred to by the chapter of the bankruptcy code that describes it.
Chapter 7 is a complete liquidation.
Chapter 13 is an adjustment of debts for individual’s with regular income.
Chapters 7 and 13 are the most common types of bankruptcy filing because they are the chapters usually used by consumers. The decision whether to file a bankruptcy under chapter 7 or chapter 13 can be difficult – considerations include whether or not you’ll fail the means test, whether you own a home that you are behind making payments on, if your home has both a first and second mortgage and the balance owed to the first exceeds the value of the home, and the total amount of secured and unsecured debt you have. There are many other points that have to be carefully considered when deciding whether chapter 13 or chapter 7 is the better bankruptcy chapter for you. The outcome of a chapter 7 bankruptcy can be very different than the outcome of a chapter 13 bankruptcy. The results and variety of considerations are a primary reason that most people should not attempt a bankruptcy case without the assistance of an experienced bankruptcy attorney. Feel free to contact our Tacoma bankruptcy attorneys to arrange an appointment to discuss whether chapter 7 or chapter 13 bankruptcy might be right for you.
The other bankruptcy chapters are Chapter 11 (business reorganization), Chapter 12 (adjustment of debts for family farmers or fisherman), Chapter 9 (adjustment of debts for a municipality) and Chapter 15 (cross-border cases). In some cases individuals can also file chapter 11 bankruptcies (usually when they fail the means test but have debts that exceed the chapter 13 secured and unsecured debt limits).
Most people have many, many more questions about bankruptcy chapters and their filing options. How long does bankruptcy take? Do I lose assets in bankruptcy? How much does bankruptcy cost? What is the bankruptcy means test? Please feel free to review the rest of our site and also fill out the form below and we’ll send you are FAQ with answers to these and many more questions.