The difference between Chapters 7, 11 and 13

While there are actually six different types of bankruptcy listed in the U.S. Bankruptcy Code, the three chapters used most predominantly are 7, 11 and 13. You can learn about the other chapters of bankruptcy here, and you can learn about Chapters 7, 11 and 13 below:

  • Chapter 7: Also called a "liquidation" or "fresh start" bankruptcy, Chapter 7 allows you to have all of your eligible debts discharged completely, usually with minimal risk to your assets. Some assets, however, could be lost, which is why you need an experienced attorney to help you maximize the protection of your assets.
  • Chapter 11: Also called a "reorganization" bankruptcy, chapter 11 is designed for large businesses or investors. Under chapter 11, the business's creditors must agree to a repayment plan under which creditors' contractual rights may be modified or left intact. There is no limit as to the amount of debt owned and the duration of the plan.
  • Chapter 13: Also called a "wage earner's" bankruptcy, in Chapter 13 creates a debt repayment plan where your debts are consolidated into a reasonable monthly payment. This allows you to catch up on secured debts and pay a portion of your unsecured debts. After 36 to 60 months of making payments, your remaining eligible debts will be discharged. Chapter 13 is generally used to stop foreclosures, repossessions and garnishments while protecting your home, car and paycheck.

An Experienced Lawyer Can Help You Weigh Your Options

Before you decide whether to file for bankruptcy, and before you decide which chapter to file under, you should talk with an attorney who can answer your questions and teach you about your rights and options.

For a free initial consultation with a lawyer at Ledford, Wu & Borges, LLC, call 312-574-3327 or contact us online today.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.