What is the difference between the different chapters of bankruptcy (Chapter 7, Chapter 11, etc.)?
Most individuals file under Chapter 7 or Chapter 13. Chapter 7 is designed for individuals with limited income and assets who wish to discharge unsecured debts, such as credit cards, personal loans, car loans/repossessions, and medical bills. Chapter 13, which is a monthly payment plan used to repay some amount to creditors, may be used when the assets and/or income of the debtor(s) is/are in excess of what is permitted under Chapter 7.
Unsecured creditors are seldom entitled to full payment through a Chapter 13 plan, and in most cases receive only a small percentage of the amount owed. A Chapter 13 is often used to stop a foreclosure action, which can be done as late as the time of the Sheriff’s sale (although we prefer as much advance notice as possible), and cure a mortgage arrearage through the Court-administered payment plan.
Chapter 11 is primarily used for corporate reorganizations, and Chapter 12 is designed specifically for family farmers and fishermen who need to reorganize their debts.
Poconos Bankruptcy Lawyer
712 Monroe Street
Stroudsburg, PA 18360