What is the difference between Chapter 7, Chapter 11, and Chapter 13? 17 Answers as of July 11, 2013

Which one is the best for me: I make roughly $60k since three months but am still very behind in payments to my student loans and payments for other things because I was unemployed for a period of time and thought I could make more after my grad degree. I don't have many assets.

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Law Office of Dennis Jay Sargent Jr, PLLC
Law Office of Dennis Jay Sargent Jr, PLLC | Dennis J Sargent Jr.
Chapter 7 Bankruptcy is what is referred to as a no-asset bankruptcy. It is best for consumers that have little or no assets. Depending on your situation and your location, your available assets are determined by your state or the federal bankruptcy code. In addition, to be able to take advantage of Chapter 7 you have to be below the means for that particular state. Most people of average means can qualify for Chapter 7. Chapter 11 Bankruptcy is for businesses and individuals with substantial assets and debts. Almost never used for average consumers. Chapter 13 Bankruptcy is the other popular means for average consumers. This is generally referred to as the wage earners plan. I like to describe it as the chapter for people with too many toys or stuff. Generally, if you have lots of equity in a home, car, boat, motorcycle or investments, or if your income is above the means you would probably have to file a Chapter 13. The chapter that is best for you is better determined by an initial consultation with a bankruptcy attorney. Generally what is best for the average consumer can be determined by a simple consultation.
Answer Applies to: North Carolina
Replied: 7/5/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
There are many differences depending on your circumstances.
Answer Applies to: Georgia
Replied: 7/4/2013
Cartwright Law Firm
Cartwright Law Firm | Andrea Cartwight
There are 3 main types of bankruptcies: Chapter 7, 11 & 13. Chapter 7 bankruptcy can be filed by individuals or businesses. In Chapter 7 bankruptcy, some of your property may be sold to pay down your debt. In return, most or all of your eliminated. However, most people get to keep all of their property like house, car, household furnishings and clothing. Though bankruptcy can eliminate many kinds of debts, such as credit card debt, medical bills, secured and unsecured loans, there are many types of debts, including child support and spousal support obligations and most tax debts, that cannot be eliminated in bankruptcy. However, not everyone can qualify to file for Chapter 7 bankruptcy. If your income is sufficient to fund a Chapter 13 repayment plan then you won't be allowed to file a Chapter 7 bankruptcy. In Chapter 13, you keep all of your property, but must make monthly payments over three to five years to repay all or some of your debt. A Chapter 13 allows you to reorganize to pay back your creditors like a car or house to prevent repossession or foreclosure or if you make too much money to qualify for a Chapter 7 Bankruptcy. A Chapter 11 is primarily for businesses to re-organize and pay back their debts and allow them to continue operating the business.
Answer Applies to: Michigan
Replied: 7/5/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
A lot goes into deciding which chapter to file.
Answer Applies to: Washington
Replied: 7/11/2013
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
A Ch 7 is the elimination of your debt giving you a fresh start. A Ch 11 is Bankruptcy for businesses and corporations. A Ch 13 is a reorganization of your debt, in which you pay your available income to the Bankruptcy Trustee for 3 or 5 years and any remaining debt is discharged. Student Loans and Income Taxes are NOT dischargeable in any of the Chapters.
Answer Applies to: New Hampshire
Replied: 7/1/2011
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
    11 is for business. 7 is personal discharging all debts except tax and school loans, whereas 13 is person with part payment for 5 years on debts.
    Answer Applies to: California
    Replied: 7/1/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Chapter 7 is called a liquidation. You list your assets, and exempt those that are allowed. If there are any assets beyond that, the trustee could sell them to pay some percentage to your unsecured creditors. Average income is determined by the last 6 months of earnings. It's over in approx. 3 months. Chapter 13 is a wage-earner plan. Usually used if a debtor can't pass the means test (current income for a single person is $50,296- though there are other calculations and that number is only a starting point) and/or has equity in property s/he doesn't want to give up, e.g. a house. Your disposable income is paid to the trustee every month for 3-5 years and the trustee pays a percentage to creditors. Anything unpaid at the end of the Plan is discharged. Chapter 11 is a reorganization, usually for business but also for high-earning individuals. I prefer 7 because it's quicker. You should see a lawyer to go over your particular circumstance to determine which is better for you.
    Answer Applies to: Virginia
    Replied: 7/1/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Chapter 11 only applies to businesses, so that's not for you. Chapter 13 is for people with assets and sufficient income to entertain a payback plan over the course of three or five years so it's unlikely that this applies to you. Chapter 7 is a liquidation of your debts and estate, however, it does not discharge student loans. Depending on your debt load and it's type, chapter 7 is likely best for you.
    Answer Applies to: Connecticut
    Replied: 7/1/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    What chapter of bankruptcy relief is "best" for someone depends on much more information than you have provided here. For those that qualify, Chapter 7 is a liquidation provision where you keep exempt assets and get rid of dischargable debt; Chapter 13 and 11 are repayment and reorganization plans for individuals and businesses, respectively.
    Answer Applies to: Indiana
    Replied: 7/1/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Chapter 7 is a liquidation where assets that are not exempt are sold for the creditors. Chapter 11 is a reorganization. Chapter 13 is a payment program. If the main debts is students loans chapter 13 may be beneficial. Student loans must be paid in full because they are not dischargeable.
    Answer Applies to: California
    Replied: 7/1/2011
    Law Offices of Sheryl S. Graf
    Law Offices of Sheryl S. Graf | Sheryl S. Graf
    You can choose the kind of bankruptcy that best meets your needs (provided you meet certain qualifications - failure to qualify is uncommon). Chapter 7 is designed for people who are having financial difficulties and are not able to repay their debts. Assuming you qualify and, like most people, have exempt assets, you get to keep everything but the debts (which are completely discharged). Some debts, however, cannot be discharged. Typical examples include student loans. Chapter 13 is commonly referred to as a repayment plan or a reorganization plan. Under Chapter 13, you keep all of your property, both exempt and non-exempt, as long as you resume making your regular payments on secure debt and keep current under the repayment plan approved by the court. A repayment plan can last for up to 5 years. Chapter 11 is used mostly by businesses. Which section of the bankruptcy code is best for you depends on your particular circumstances. The first step should be to meet with a qualified attorney who helps people file for relief under the bankruptcy code. An experienced attorney can analyze your situation and explain to you your options. If it appears from this analysis that bankruptcy may be an appropriate remedy for you, an attorney can make a specific recommendation and provide a procedural timetable. If it appears that bankruptcy may not be an appropriate remedy for you, there should be a discussion of other possible alternatives.
    Answer Applies to: California
    Replied: 7/1/2011
    Law Office of J. Scott Logan, LLC
    Law Office of J. Scott Logan, LLC | John Scott Logan
    You may or may not be eligible for Chapter 7. Neither Chapter 7 nor 13 will discharge the student loans. Chapter 13 will have the effect of deferring them for the 3-5 year repayment plan, during which you would repay your creditors what you can afford.
    Answer Applies to: Maine
    Replied: 7/1/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    The difference between a chapter 7 bankruptcy, chapter 13 bankruptcy and chapter 11 bankruptcy are significant. A chapter 11 bankruptcy is used for business reorganization so that would not apply to you. A chapter 7 bankruptcy is the "start fresh" bankruptcy and allows you to discharge most debts. In order to qualify for a chapter 7 you must make below the median income in your state for your family size or satisfy the means test. A chapter 13 is for debtors who are above median income or are looking to strip a second mortgage or make up mortgage payments in most cases. In a chapter 13 bankruptcy you must make payments based on the disposable income that you have available after paying your expenses.
    Answer Applies to: Washington
    Replied: 7/1/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    The differences are assets, liabilities and income. Think Dodgers or homeless guy on street as extremes on this conceptual outline. Consult an attorney for more info.
    Answer Applies to: California
    Replied: 7/1/2011
    Saedi Law Group
    Saedi Law Group | Lorena Saedi
    Chapter 11 bankruptcy cases are reserved for business they are attempting to reorganize and individuals who have assets and debts at extremely high levels. Chapter 13 is a debt consolidation and repayment plan that can stretch over 5 years. Chapter 7 is a complete discharge of your debts which are eligible and lasts about 5 months. Determining which type is best for you will be based on several factors that an experienced bankruptcy attorney can assist you in making the right choice.
    Answer Applies to: Georgia
    Replied: 7/1/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Chapter 11 is generally used by businesses and costs a small fortune. It is rarely an option for indivdiuals. Chapter 7 gets rid of debts but will not affect student loans. Chapter 13 may be a way to repay student loans. You likely cannot qualify for all 3. The numbers that work in one case generally prevent the other. Your best option is see a lawyer to run your numbers. You may find a good answer.
    Answer Applies to: Georgia
    Replied: 7/1/2011
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