Every Type of Bankruptcy Explained

3,726 families have filed bankruptcy using Upsolve. Learn More.

Written by Kristin Turner, Harvard Law Grad.  
Updated July 10, 2020


Bankruptcy has helped millions of Americans relieve their debt burden and get a fresh start. There are different types, so it's important to know the differences and similarities. Upsolve is a non-profit that helps low-income households relieve their debt through Chapter 7 bankruptcy at no cost. Get started today with Upsolve, or read to learn more about the other types of bankruptcy.

Are You Considering Bankruptcy?

If you are struggling with debt, you may not know where to turn. You have tried everything you can think of to get back on your feet financially, but nothing has worked. Have you considered the types of bankruptcies that may help you get out of debt and back on your feet?

Your creditors are calling every day, and you hate checking the mailbox for fear of receiving notice of a debt collection lawsuit. Have you considered the types of bankruptcies that might stop creditor harassment and debt collections?

You have heard that bankruptcy might help, but you are not sure of the types of bankruptcy available for you. Do you qualify to file Chapter 7Should you file Chapter 13? What types of bankruptcies can you file?

Choosing Between the Different Types of Bankruptcies in America

The various types of bankruptcies available to individuals are based on the qualifications for each chapter of bankruptcy. The Bankruptcy Code sets forth the qualifications for each chapter of bankruptcy.

Individuals may file under the following types of bankruptcies:

  • Chapter 7 — Liquidation Bankruptcy*

  • Chapter 13 — Repayment Plan*

  • Chapter 11 — Large Reorganization

  • Chapter 12 — Family Farmers

  • Chapter 15 — Used In Foreign Cases

*The two most common types of bankruptcies for individuals in America are Chapter 7 and Chapter 13.

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Types of Bankruptcies — Filing Under Chapter 13

One of the types of bankruptcies that you might consider filing is a Chapter 13 case. A Chapter 13 case is a repayment plan. You must pay at least a portion of the amount you owe to unsecured creditors to a Chapter 13 trustee.

These types of bankruptcies can help a debtor keep their home and car if they are behind on the loan payments. However, these types of bankruptcies are much more difficult to file compared to other types of bankruptcies.

Types of Bankruptcies — Filing Under Chapter 7

Chapter 7 bankruptcy case is a liquidation bankruptcy case. A Chapter 7 trustee is appointed by the court to administer the case. If the bankruptcy trustee identifies assets that have non-exempt equity, these assets may be sold by the Chapter 7 trustee to pay unsecured debts.

Most Chapter 7 cases are no-asset cases. In a Chapter 7 no-asset case, the debtor keeps all his or her property. These types of bankruptcies are much more common than Chapter 7 cases that are considered asset cases.

Therefore, most debtors file Chapter 7 and do not lose any property, but they get rid of thousands of dollars in unsecured debts.

If this sounds like the solution for you, check out Upsolve. We are a nonprofit organization whose mission is to help low-income individuals and couples who are suffering from a financial hardship to gain a fresh start through Chapter 7 bankruptcy at no cost. Millions of people have chosen to get rid of their debts through bankruptcy, more than 3,000 of them with our free help. You can too!

Types of Bankruptcies — Chapter 7 vs. Chapter 13

When comparing types of bankruptcies, most people compare Chapter 7 vs. Chapter 13.

With a Chapter 13 case, the bankruptcy repayment plan usually takes at least 60 months to complete. Most Chapter 7 cases are completed within four to six months after the date you file your bankruptcy petition.

Both types of bankruptcies offer a bankruptcy discharge at the end of the case. A bankruptcy discharge relieves your legal duty to repay a debt. However, Chapter 13 cases require you to repay some of your debt back to creditors. Chapter 7 cases do not have a repayment plan.

Some debts are not eligible for a discharge in any of the types of bankruptcies. Alimony, child support, most income taxes, and student loans cannot be discharged. Debtors must pay these debts in any of the types of bankruptcies filed.

Federal and state bankruptcy exemptions protect assets in both types of bankruptcies. In most Chapter 7 cases, bankruptcy exemptions protect all the debtor’s property. Therefore, you get rid of your debts, but you keep all your property.

The types of bankruptcies available to you depend on your income level. To qualify for a Chapter 7 case, you must meet income requirements.

The Means Test is designed to compare a debtor’s income to the average income of households in your area. If your average income is below the average income of a household of your size, you can qualify to file under Chapter 7. If your income exceeds the median income level, there is a second section of the test that might help you qualify to file under Chapter 7.

Do you want to find out if you qualify to file under Chapter 7? Take our screener to start Upsolve’s free bankruptcy process.

Types of Bankruptcies — Filing Without an Attorney

Are there types of bankruptcies you can file without an attorney?

Yes, there are types of bankruptcies you can file without an attorney. The law does not require you to hire an attorney to file under Chapter 7 or Chapter 13. However, it is not advisable to file under Chapter 13 without an attorney.

Even though the bankruptcy forms are similar for these two types of bankruptcies, a Chapter 13 case is far more complex. You must calculate a Chapter 13 repayment plan, which can be very difficult without extensive knowledge of the bankruptcy laws and rules governing the requirements for a Chapter 13 plan.

Therefore, most people pay a bankruptcy attorney to represent them when filing under Chapter 13.

However, filing under Chapter 7 does not require you to file a repayment plan. The Means Test and other forms in a Chapter 7 case are not as difficult as those in other types of bankruptcies.

Upsolve, a Harvard Law School-grown nonprofit organization provides Chapter 7 bankruptcy services to low-income individuals at no cost to the individual. We have developed a step-by-step procedure for helping individuals who cannot afford to pay an attorney get out of debt through Chapter 7.

Watch past users who are just like you explain how it works, and join the millions of others who have gotten a second chance with bankruptcy. We help you navigate the court system and legal terms to take the first step on your road to a debt-free life.

What Can Chapter 7 do for Me?

If you are struggling to repay your debts, a Chapter 7 bankruptcy case can give you freedom from those debts. Filing for bankruptcy relief allows you to get rid of the debts you cannot pay so that you can rebuild your finances.

You keep your property so that you can move forward knowing you have what you need to provide for yourself and your family. A Chapter 7 case stops creditor harassment and debt collection.

It does not matter why you need bankruptcy relief. The bankruptcy court does not pass judgment on debtors when they file any of the types of bankruptcies available under the law.

Some common reasons people file for bankruptcy relief include unemployment, divorce, decreased income, business failure, medical bills, accidental injury, and loss of a family member. You have the same right to file for bankruptcy relief as any other person.

If you have been suffering from stress-related health problems, filing for bankruptcy relief can relieve the stress. It is easy to see if you qualify. Give us your email address and click here to see if you qualify for our no-cost services.

About the author

Kristin Turner, Harvard Law Grad
Recipient of Harvard Law School’s Public Welfare Foundation A2J Tech Fellowship.

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.


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