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Chapter 11: Reorganization.
This chapter is attractive mostly to corporations seeking to rehabilitate a business. However, it is also designed to assist individuals with substantial assets to reorganize their affairs. This chapter should be approached with caution since its provisions are complex and decisions thereunder best approached with the assistance of competent counsel. I do not file cases under Chapter 11.
Chapter 13: Wage Earner Plan.
This form of bankruptcy allows individuals with regular income to develop a repayment plan for all or some of their outstanding debt. It is especially attractive to Debtors wanting to hang onto major assets (e.g., a house or a car) that are in danger of foreclosure or repossession. There are also attractive features allowing for the recharacterizing of under-secured debt, like cramdowns on older vehicles and stripping of second mortgages. The filing fee for a Chapter 13 is $310; attorney fees are separate.
Chapter 7: Liquidation.
This is the type of relief most consumers seek –and what most people think about as “total” bankruptcy. It is a complete discharge of all unsecured debt, including credit cards and medical expenses. Chapter 7 does not discharge all tax debts (there are specific rules for when taxes are dischargeable) or student loans, in most cases. However, a case brought under this provision can be the simplest and quickest vehicle to a fresh start. There are income limits to qualify for Chapter 7 bankruptcy. The filing fee for a Chapter 7 is $335; attorney fees are separate.