What is the Difference Between Chapter 7, 11 & 13 bankruptcy?

Chapter 7 is a liquidation. All non-exempt assets are sold and used to pay debts. Any debt left over is discharged. You may be able to reaffirm some debts, such as a home or car loan.

Chapter 11 is a reorganization. It is used by businesses and also by people with more than $200,000 in unsecured debt and $800,000 in secured debt (these numbers are not exact). Debts are not generally discharged but interest and penalties can be discharged. A payment plan must be proposed to the court whereby the debts will be paid over time.

Chapter 13 is a reorganization for use by consumers. A repayment plan is made and then the debts are repaid over time.