Chapters 7, 11 & 13 of the United States Bankruptcy Code Explained

Written by Adam Peck Category: Nursing Homes January 23rd, 2013 2 min read

The United States Bankruptcy code outlines procedural requirements for a bankruptcy filing under either chapter 7, 11 or 13. When you are considering filing for a bankruptcy, you should have detailed information of qualification criteria under any of the aforesaid chapters. Here is a brief description of various bankruptcy filing processes.

Chapter 7 bankruptcy process:
When filing for personal bankruptcy, it is pertinent for you to know what is chapter 7 bankruptcy. A bankruptcy under chapter 7 entitles an applicant liquidation and discharge of personal liabilities through an orderly, court supervised procedure wherein the overseeing trustee takes over the assets of the debtor and converts them into cash to repay all the creditors. This excludes certain exempt property for which the debtor has a right to retain. Typically, a chapter 7 bankruptcy does not require the debtor to appear in the court and face the bankruptcy judge unless an objection is raised in the case by some creditor or creditors. But to qualify for a chapter 7 bankruptcy, a debtor must pass the “Means Test”.

Chapter 13 bankruptcy procedure:
If a debtor fails to pass the “Means Test” as mentioned above, he does not qualify for a chapter 7 personal bankruptcy but becomes eligible for a chapter 13 bankruptcy. However, chapter 13 bankruptcy laws are distinctly different from chapter 7 bankruptcy laws. While the debtor remains in charge of his property, he is required to repay his creditors in a time period of three to five years by proposing a plan that is approved by the creditors as well as the bankruptcy court. A debtor filing chapter 13 bankruptcy may have to appear before a bankruptcy judge to confirm the repayment plan through a formally arranged meeting at the office of the U.S. trustee which is called the “341 meeting”.

Process for chapter 11 bankruptcy:
A chapter 11 bankruptcy process deals with small business enterprises which desire to continue operating their business. The bankruptcy code provides chapter 11 bankruptcy information, according to which the process entitles small business owners with a reorganization plan that is approved by the bankruptcy court 120 days after the business files for a bankruptcy, to repay the creditors. The court has the final authority to approve or disapprove the plan of reorganization. Thus, the debtor usually undergoes a period of consolidation and emerges with much reduced debts as well as reorganized business.

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.