There are various kinds of bankruptcy cases, referred to by the number of the U.S. Code that defines them. A Chapter 7 Bankruptcy is a case filed under 11 U.S.C. 701, and is a means by which an individual can get relief from most of his/her/their debt obligations by discharging most or all of their existing debt. Simply stated, the person or couple filing for Chapter 7, referred to as the Debtor, is allowed to keep certain property by claiming the property as “exempt” according to a schedule of exemptions. Any property which is not allowed to be exempted can be liquidated or sold by a trustee appointed to oversee the case. If you disclose all of your assets and debts, complete credit counseling and financial management courses, the court will enter an order discharging your eligible debts.
Other chapters in bankruptcy include Chapter 11, which is a reorganization process for businesses or individuals engaged in business, and Chapter 13, which is a reorganization that provides for repayment of consumer debts. There are other, less common kinds of bankruptcy, such as Chapter 12 for family farmers, Chapter 9 for municipalities, and Chapter 15 for international cases.