Bankruptcy Code
Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is, with
the exception of exemptions, the same in every state. When federal bankruptcy law conflicts with state law, federal
law controls.
Bankruptcy Estate
The estate is all of the legal and equitable interests of the debtor as of the commencement of the case. From the
estate, an individual debtor can claim certain property exempt; the balance of the estate is liquidated in a Chapter 7
to pay the administrative costs of the proceeding and the claims of creditors according to their priority.
Chapter 7
Chapter 7 bankruptcy is a process provided for under United States federal law by which you are entitled to a fresh
start. Chapter 7 may eliminate most kinds of unsecured debt. It is usually designed for someone with no assets.
Chapter 11
A reorganization proceeding in which the debtor may continue in business or in possession of its property as a
fiduciary. A confirmed Chapter 11 plan provides for the manner in which the claims of creditors will be paid in whole
or in part by the debtor.
Chapter 12
A simplified reorganization plan for family farmers whose debts fall within certain limits. Chapter 12 was not renewed
when it expired this session of Congress.
Chapter 13
Chapter 13 is an interest-free debt repayment plan through which you consolidate your debts and make a payment
on your debt over a 3 to 5 year period. This type of bankruptcy is often used to save a house from foreclosure or to
save a car from repossession.