Types of Bankruptcy

There are several types of bankruptcy depending on who you are and what type of bankruptcy you want to file. The types of bankruptcy you will have heard of are shown below. The types of bankruptcy and the United States bankruptcy laws are outlined in the US Bankruptcy Code Title 11.

Two types of bankruptcy, namely Chapter 7 bankruptcy and Chapter 13 bankruptcy, are personal bankruptcy while Chapter 11 bankruptcy is primarily for corporations and Chapter 12 bankruptcy for farm owners. For more on types of bankruptcy for people, see Personal Bankruptcy section.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is named after the United States Bankruptcy Code Title 11. Chapter 11 bankruptcy applied to corporations that want to reorganize thier finances and still be in business. Chapter 11 bankruptcy is also known as the reorganization bankruptcy. This is a very complex type of bankruptcy. The old bankruptcy laws allow businesses to take thier time to come up with the reorganization plan to pay off their creditors. However, the new bankruptcy laws, which include The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, imposes a 120-day time limit. If the debtor has not submitted a bankruptcy reorganization plan within that period, creditors can submit their own plans. Although Chapter 11 bankruptcy is mostly filed by corporations, people with extremely high debts can also file for Chapter 11 bankruptcy.

Chapter 12 Bankruptcy

Chapter 12 bankruptcy is a special kind of bankruptcy for farm owners or a family farmer with regular annual income. Under the Chapter 12 bankruptcy laws, the debtor still owns his assets while he or she works out a repayment plan with his or her creditors.