What is the difference between Chapter 7, Chapter 13 and Chapter 11 bankruptcy protection?
Chapter 7, which is sometimes called “straight bankruptcy,” is a liquidation of most, if not all, unsecured debt. While it is true that the 2005 amendments to the Bankruptcy Code have made it more difficult to file for Chapter 7, a surprising number of individuals still qualify for this approach to debt relief. Chapter 13 is a reorganization of debt. Once a debtor qualifies for protection under Chapter 13, they must submit to the bankruptcy court a plan for payment of debts (usually within a period of three to five years). Chapter 11 is also a reorganization of debt, but is generally associated with businesses. In some cases, individuals may file for Chapter 11 protection, but it is best to seek the advice of an attorney to determine if this is right for you.
