Chapter 7: Also known as liquidation, allows
individuals or businesses to give up nonexempt assets and walk
away from most debts.
Chapter 9: This section allows municipalities
to reorganize debt.
Chapter 11: For individuals and, more commonly,
businesses to reorganize debt. Similar to Chapter 13, in that
it allows the filer to draft a plan to repay some debt while retaining
assets. Chapter 11 has no debt limits, but is much more complicated,
and therefore expensive, making it financially feasible mainly
for businesses and very wealthy individuals.
Chapter 12: Allows family farmers to reorganize
debt. It works very much like Chapter 13, but with higher debt
limits.
Chapter 13: For individuals who need
to restructure their debt load. Some creditors will be paid back
in full with interest, others in full and the remainder will be
repaid a percentage of the debt.
