Bankruptcy comes in two options : Reorganization & Liquidation
Liquidation for Individuals

In a Chapter 7 bankruptcy, an individual is entitled to keep some items known as exempt property.

Some debts are considered so significant by Congress that they are not dischargeable.

Even if a debt is not dischargeable, the law requires that it be listed on a bankruptcy schedule.

Unless a court order is issued, fully secured creditors will keep their claim on the collateral.

Reorganizations for Individuals

Petition, Schedules, Statement of Affairs, and other documents are required to be filed with the Bankruptcy Court by the debtors.

Chapter 13 varies greatly from district to district, based on local customs and opinions regarding what is “fair” and in “good faith” by local trustees and judges.

Business Reorganizations
  • Chapter 9 (municipality)
  • Chapter 11 (business)
  • Chapter 15 (cross border bankruptcy)

Unlike liquidation, reorganization allows a business debtor to keep operating the business and keep assets that might otherwise be lost in a chapter 7 bankruptcy.

Reorganizations can be used to remove entirely unsecured mortgages or pay the fair market value of a property.

A debtor must have sufficient income to make a reorganization plan possible in order to be qualified for a reorganization bankruptcy.