2. Chapter 7
Chapter 7 bankruptcy is considered liquidation bankruptcy
also known as straight bankruptcy. The debtor (individual
who files for bankruptcy) basically is relieved from any
future obligations on his discharged debts. The debtor can
keep personal items like a house or car but he or she must
the payments. Otherwise, the debtor must surrender the
car.
3. Chapter 13
Chapter 13 bankruptcy requires the debtor to pay all or half
the debts. In some cases the court allows 3 to 5 years to
pay depending on the plan. On the other hand long-term
debt and home mortgages must be paid on time on the
normal schedule.
4. Chapter 11
Businesses and corporations use Chapter 11 bankruptcy in
order to re-organize debts and continue operating their
businesses.
5. Chapter 12
Commercial fishermen and farmers file for Chapter 12
bankruptcy in order to re-organize debts and continue
operating. Debt payments can be paid seasonally during
the point in the year where farmers and fishermen earn
revenue.
