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Types of Bankruptcy

June 18, 2020

You can choose the kind of bankruptcy that fits your needs:

Chapter 7

Liquidation, Individuals, and Corporations

A trustee is appointed to take over any non-exempt property. Any property that is non-exempt could be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the state where you live. Most people keep all of their assets in Florida.

Chapter 9


Chapter 11

Corporations, Individuals Who Owe More Than
$360,445 Unsecured or $1,081,400 Secured

This is used mostly by businesses and property owners of multiple properties. In chapter 11, you may continue to operate your business, but the creditors and the court must approve a plan to repay your debts. There is no trustee unless the judge decides that one is necessary. If a trustee is appointed, the trustees takes control of your business and property.

Chapter 12


Like chapter 13, but is only for family farmers.

Chapter 13

Individual Reorganization/Payment Plan
(Minimum of 3 years, up to 5 years)

You can usually keep your property, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The court must approve your repayment plan and your budget. A trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of your repayment plan.

This is where we strip second mortgages, cramdown rental property, and modify mortgages under HAMP or traditional modifications.

You can save your home by attempting a loan modification in Chapter 7 or Chapter 13. In Chapter 13 you can protect assets that might not be protected a Chapter 7.