Types of Personal Bankruptcy
 

Types of Personal Bankruptcy 

There are three (3) types of personal bankruptcy: (a) Chapter 11 (b) Chapter 13 and (c) Chapter 7. Chapter 7 is known as a “liquidation and fresh start” (this is the type of bankruptcy that most clients file for). If a client only has credit card debt and no non-exempt assets, they would file a Chapter 7 bankruptcy petition-provided their income is below the Median Income and they fail the Means Test. Chapter 13 is known as a wage-earner reorganization. If your income exceeds the Median Income, or you fail the Means Test, or you have a house or a car that you want to keep after the bankruptcy filing, then you would file a Chapter 13 bankruptcy petition. An individual can only file for Chapter 7 bankruptcy protection once every 8 years. Chapter 11 bankruptcy is a “reorganization” for well-to-do individuals and corporations.