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An individual who is badly in debt can typically file for bankruptcy either under Chapter 7 (liquidation, or straight bankruptcy) or Chapter 13 (reorganization).In some cases, options may also include Chapter 12 (family farmer reorganization) and Chapter 11 (reorganization of a company, or an individual debtor whose debts exceed the limits for a Chapter 13 filing). [2]
Bankruptcy under Chapter 11, Chapter 12, or Chapter 13 is a more complex reorganization and involves allowing the debtor to keep some or all of his or her property and to use future earnings to pay off creditors. Consumers usually file chapter 7 or chapter 13. Chapter 11 filings by individuals are allowed, but are rare.
December 9, 2024 at 11:13 AM. ... Chapter 13 bankruptcy, known as a “wage earner’s plan,” is a popular route for individuals who want to repay their debts while keeping more assets.
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whether organized as a corporation, partnership or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. [1]
Individuals may also file for bankruptcy under Chapter 11, but that is not common. Although any bankruptcy is a kind of financial death, companies may emerge from Chapter 11 financially stable.
Key takeaways. Chapter 7 bankruptcy involves discharging debt through liquidation. Chapter 13 bankruptcy focuses on reorganizing debt through a repayment plan that typically lasts three to five years.
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