Confused by Chapter 7, 13, or 11? Learn which type of bankruptcy fits your situation with expert legal guidance from Queens-based attorneys.
Feeling overwhelmed by debt? You’re not alone.
At Pagan Lopez Law, we understand how stressful and confusing the idea of bankruptcy can be. That’s why we’ve created this easy-to-understand guide that explains the different types of bankruptcy and which one may be right for your unique financial situation.
What Is Bankruptcy and Why Are There Different ‘Chapters’?
Bankruptcy is a legal process that provides relief for individuals, families, and businesses that are unable to repay their debts. Each type of bankruptcy is categorized by a chapter of the U.S. Bankruptcy Code, tailored to specific financial circumstances and goals.
Explore Your Options
Chapter 7 – Fast Relief for Those with Limited Income
If you have low income and mostly unsecured debt, Chapter 7 might offer a clean financial slate. For example, Maria, a single mother in New York, lost her job during the pandemic. With mounting credit card bills and loans, she filed for Chapter 7 and was able to discharge much of her debt quickly. This is how you can prepare your filing.
Chapter 13 – Reorganization for Wage Earners and Those Over Chapter 7 Income Limits
Chapter 13 is suitable for individuals with a steady income who wish to retain assets like a home or car by reorganizing their debts into a manageable repayment plan over 3 to 5 years. It’s also an option for those who exceed the income threshold required to qualify for Chapter 7 bankruptcy. In addition to asset protection, Chapter 13 can provide a structured pathway to repay a portion of debts while avoiding liquidation. There are a few key distinctions between Chapter 7 and Chapter 13 that you should understand.
Chapter 11 – Reorganization for Businesses and High-Income Individuals
Primarily used by businesses to restructure debts while continuing operations, Chapter 11 can also apply to individuals with substantial debts and assets. This chapter is especially useful for individuals who exceed the income limits of Chapter 7 or the income and debt limits of Chapter 13. It offers a customizable repayment plan, allowing debtors to propose a strategy to pay creditors over time while maintaining greater control of their assets.
Chapter 12 – Designed for Farmers and Fishermen
Tailored to the specific needs of agricultural producers and fishermen, Chapter 12 offers a streamlined process for managing and repaying debt.
Chapter 9 – For Municipalities in Financial Crisis
This chapter applies to cities, towns, and public entities that are overwhelmed with debt and require legal debt adjustment support.
Chapter 15 – When International Debts or Assets Are Involved
Chapter 15 helps coordinate bankruptcy proceedings across multiple countries when cross-border financial matters are at play.
Every situation is different. Get tailored advice from the experienced team at Pagan Lopez Law.
Which Path Is Right for You?
The right bankruptcy chapter for you depends on various factors, including income level, asset ownership, debt types, and whether you’re filing as an individual or business. Bankruptcy is not giving up—it’s taking control of your financial future with a plan.
At Pagan Lopez Law, We’re Here to Help
Our experienced and compassionate bankruptcy attorneys in New Jersey, New York and the greater New York City area are ready to review your case, explain your options, and guide you every step of the way. At Pagan Lopez Law we are dedicated to guiding clients through the complexities of bankruptcy. We offer personalized consultations to explore your options and develop a strategy aligned with your financial goals. We are committed to helping you protect what matters most and start fresh with confidence.
📞 Ready to Talk?
Schedule your free consultation today with a trusted bankruptcy lawyer in New York and New Jersey.
Contact: (347) 434-3040 | 28-07 Jackson Avenue, Tower 3, 5th Floor, Long Island City, NY 11101
Disclaimer:
This content is for informational purposes only and does not constitute legal advice. Every financial situation is unique. Please consult a qualified attorney before making any legal decisions regarding bankruptcy.