7, 11, 12, 13? What Does It Mean??

September 2008 Consumer Bankruptcy Filings Are Up: Learn About The Differences in Chapter 7, 11, 12 and 13


Consumer bankruptcy filings increased 28.6 percent nationwide in September 2008 from the same period a year ago, according to the American Bankruptcy Institute (ABI).

As the United States economy worsens, it is expected that the increase in personal bankruptcies will carry over into an increase in business and corporate filings also.

There are four main chapters under the U S Bankruptcy Code:

Chapter 7 of the Bankruptcy Code is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor’s available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start.

Chapter 11 of the Bankruptcy Code is available for both business and consumer debtors. Its purpose is to rehabilitate a business as a going concern or reorganize an individual’s finances through a court-approved reorganization plan.

Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming.

Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; it is typically used to budget some of the debtor’s future earnings under a plan through which unsecured creditors are paid in whole or in part.

If you have any questions about Bankruptcy Law, please contact attorney Todd Jones with Anderson Jones, PLLC. He can be reached at (919) 277-2541 or by email.