What are the different kind of bankruptcies?
Most bankruptcies filed by individuals and small businesses are under Chapters 7, 11 and 13 of the Bankruptcy Code. Chapter 7 is an individual, no-asset liquidation. If you are unemployed or under-employed, do not own a home and have substantial debt, you may be eligible to file for Chapter 7 protection. Chapter 11 is a reorganization, usually for a business. Debts are administered by a bankruptcy Trustee (usually an attorney who is a federal employee) and sometimes a committee of creditors. A monthly payment amount is set, and payments are made out of current income, and allocated by the Trustee to the creditors. Creditors will be paid, but often only a fraction of what they are owed. Chapter 13 is also a reorganization, but for individuals. It is designed to protect a large asset, usually a home. Like the Chapter 11, payments are made on a monthly basis and allocated by the Trustee. A Chapter 13 offers protection from foreclosure. Eligibility for Chapter 13 is based on ability to pay
