Bankruptcy Filing Process Revealed Change Your Future Today
October 27, 2025
The Types of Bankruptcy: Chapter 7 and Chapter 13
In the United States, the most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7, often referred to as "liquidation bankruptcy," involves selling off non-exempt assets to pay creditors. This process typically takes about four to six months and can discharge most of your unsecured debts, such as credit card debt and personal loans1.
Chapter 13, on the other hand, is known as a "reorganization bankruptcy." It allows you to keep your assets while repaying debts through a court-approved repayment plan over three to five years. This option is suitable for individuals with a regular income who can afford to pay back a portion of their debts2.