Master Bankruptcy Secrets Save Your Financial Future Today
October 28, 2025
Types of Bankruptcy: Which Is Right for You?
In the United States, the most common types of bankruptcy filings are Chapter 7 and Chapter 13. Chapter 7, often referred to as "liquidation bankruptcy," involves the sale of a debtor's non-exempt assets, with the proceeds distributed to creditors. This type of bankruptcy is typically suited for individuals with limited income who cannot repay their debts1.
On the other hand, Chapter 13, known as "reorganization bankruptcy," allows individuals with a regular income to create a plan to repay all or part of their debts over a three to five-year period. This option is ideal for those who have a steady income and want to keep their assets, such as a home or car, while catching up on missed payments2.