The U.S. Bankruptcy Code contains six chapters: Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15.1Legal Information Institute. U.S. Code Title 11 – Bankruptcy So when people ask how many bankruptcy chapters there are, the answer is six, and each one is built for a different kind of debtor. Chapter 7 liquidates assets to wipe out debts. Chapter 9 is for municipalities. Chapter 11 reorganizes businesses. Chapter 12 is for family farmers and fishermen. Chapter 13 sets up a repayment plan for individuals. Chapter 15 handles cross-border cases. All six run through federal bankruptcy courts.
Chapter 7: Liquidation
Chapter 7 is the most commonly filed type of bankruptcy in the country. A court-appointed trustee gathers your nonexempt property, sells it, and distributes the proceeds to creditors. In return, most of your remaining eligible debts are discharged. Exemption laws — set by state and federal statutes — protect basic household goods, clothing, retirement accounts, and a limited amount of home equity from being sold.
Individuals, corporations, partnerships, and LLCs can all file, but only individuals receive a discharge. When a business files Chapter 7, operations shut down permanently and remaining value goes to creditors. There is no fresh start for the business itself.2United States Courts. Chapter 13 – Bankruptcy Basics
The Means Test
Individuals must pass the means test. Your average monthly income for the six months before filing is compared to the median income for a household your size in your state. Below the median, you qualify automatically.3U.S. Department of Justice. Means Testing Above the median, a second calculation subtracts certain allowed monthly expenses from your income; if what’s left is too little to fund a meaningful Chapter 13 plan, you still qualify. The test keeps higher earners from wiping out debts they could realistically repay.
Timeline and Cost
Most individual Chapter 7 filers receive their discharge 80 to 100 days after filing. Court fees total $338, made up of a $245 base filing fee, a $78 administrative fee, and a $15 trustee surcharge.4Office of the Law Revision Counsel. 28 U.S. Code 1930 – Bankruptcy Fees5United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Attorney fees generally run $600 to $3,000 on top of that, depending on location and complexity.
Chapter 13: Individual Repayment Plans
Chapter 13 lets you keep your property and repay some or all of your debts through a three-to-five-year plan. Only individuals with regular income (including sole proprietors) can file. Corporations and partnerships cannot.6Office of the Law Revision Counsel. 11 U.S. Code 109 – Who May Be a Debtor You propose a plan, and a Chapter 13 trustee collects your monthly payments and pays creditors in the court-approved order.2United States Courts. Chapter 13 – Bankruptcy Basics
If your income is below your state’s median for your household size, the plan runs three years, though the court can allow longer. Above the median, it generally runs five. All of your projected disposable income during that period goes to unsecured creditors.
Debt limits apply. For cases filed between April 1, 2025, and March 31, 2028, your noncontingent, liquidated unsecured debts must be less than $526,700, and your noncontingent, liquidated secured debts must be less than $1,580,125.2United States Courts. Chapter 13 – Bankruptcy Basics Over those caps, Chapter 11 may be the alternative.
You receive a discharge of remaining eligible debts only after completing all payments. Fall behind, and the court can dismiss the case or convert it to Chapter 7.
Chapter 11: Business Reorganization
Chapter 11 lets a business keep operating while it restructures its debts. Corporations, partnerships, and LLCs use it to build a plan of reorganization laying out how creditors will be repaid over time. The debtor typically stays in charge of its assets and daily operations as a “debtor in possession” instead of turning things over to a trustee.7United States Courts. Chapter 11 – Bankruptcy Basics
Before creditors vote on the plan, the debtor prepares a disclosure statement with enough information for an informed decision. The court approves the disclosure statement before votes are solicited.8Office of the Law Revision Counsel. 11 U.S. Code 1125 – Postpetition Disclosure and Solicitation Even if some creditor classes reject the plan, the court can still confirm it under certain conditions.
Individuals and Subchapter V
Individuals whose debts exceed the Chapter 13 caps can file under Chapter 11 as well. A streamlined track called Subchapter V is open to small business debtors with combined secured and unsecured debts of $3,424,000 or less, as long as at least half of those debts came from the debtor’s business activities.7United States Courts. Chapter 11 – Bankruptcy Basics Subchapter V cases move on shorter deadlines, allow more flexible creditor negotiations, and skip the U.S. Trustee’s quarterly fees.9U.S. Department of Justice. Subchapter V Small Business Reorganizations
Chapter 11 is the most expensive bankruptcy to file. The court filing fee is $1,167 plus a $571 administrative fee, for a total of $1,738.4Office of the Law Revision Counsel. 28 U.S. Code 1930 – Bankruptcy Fees5United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Outside Subchapter V, the debtor also pays quarterly U.S. Trustee fees based on disbursements during the case, starting at $325 per quarter and rising as amounts grow.
Chapter 12: Family Farmers and Fishermen
Chapter 12 is a reorganization process built around the economics of family farming and commercial fishing. Both industries carry heavy capital costs and earn income seasonally, so Chapter 12 allows payment schedules tied to harvest or fishing cycles rather than flat monthly installments.10United States Courts. Chapter 12 – Bankruptcy Basics
To qualify, more than half of your gross income for the prior tax year (for farmers, each of the second and third prior tax years) must come from your farming or fishing operation, and your total debts cannot exceed set ceilings:
- Family farmers: combined secured and unsecured debts of $12,562,250 or less
- Family fishermen: combined secured and unsecured debts of $2,568,000 or less
Individuals and certain family-owned corporations and partnerships can file. The court filing fee is $278, consisting of a $200 base fee plus a $78 administrative fee.4Office of the Law Revision Counsel. 28 U.S. Code 1930 – Bankruptcy Fees
Chapter 9: Municipal Bankruptcy
Chapter 9 is only for municipalities: cities, counties, townships, school districts, and similar public entities. No other debtor can use it, and municipalities cannot use any other chapter.11United States Courts. Chapter 9 – Bankruptcy Basics
A municipality cannot simply file on its own. It must first be specifically authorized by its state, either through state law or by a state-empowered official. Constitutional limits on federal power over state and local governments shape the rest of the process. The bankruptcy court cannot order the sale of municipal assets, cannot appoint a trustee to run the municipality, and cannot interfere with its governmental powers, property, or revenues without consent. The municipality proposes its own plan to adjust debts, usually through refinancing, extending payment terms, or reducing principal.
Chapter 15: Cross-Border Insolvency
Chapter 15 handles international cases where a debtor has assets or creditors in more than one country. It was added to the Bankruptcy Code in 2005, replacing an earlier provision, and is based on the Model Law on Cross-Border Insolvency developed by the United Nations Commission on International Trade Law (UNCITRAL) in 1997.12United States Courts. Chapter 15 – Bankruptcy Basics Canada, Mexico, Japan, and several other countries have adopted versions of the same model law.
The case starts when a foreign representative, someone authorized to act in an insolvency proceeding outside the United States, files a petition asking a U.S. bankruptcy court to recognize the foreign proceeding.13Office of the Law Revision Counsel. Title 11, Chapter 15 – Ancillary and Other Cross-Border Cases Once recognized, the U.S. court coordinates with the foreign court so that assets located here are handled consistently with the main case abroad. The filing fee is $1,738, the same as Chapter 11.4Office of the Law Revision Counsel. 28 U.S. Code 1930 – Bankruptcy Fees
Debts Bankruptcy Cannot Erase
Whichever chapter you file under, certain debts survive a discharge:14Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge
- Domestic support obligations, including child support and alimony
- Recent income taxes, and taxes tied to a fraudulent return or failure to file
- Student loans, unless you can prove repayment would cause “undue hardship,” a standard courts rarely find met
- Debts obtained through fraud or misrepresentation
- Criminal fines and most penalties owed to government entities
- Debts from willful and malicious injury to another person or their property
Timing rules apply to recent charges. Luxury goods or services charged to a single creditor totaling more than $900 within 90 days before filing are presumed non-dischargeable, and the same goes for cash advances over $1,250 taken within 70 days of filing.
How Long a Bankruptcy Stays on Your Credit Report
A bankruptcy filing can appear on your credit report for up to 10 years from the date the court enters the order for relief.15Office of the Law Revision Counsel. 15 U.S. Code 1681c – Requirements Relating to Information Contained in Consumer Reports In practice, the major credit bureaus generally remove a completed Chapter 13 case after seven years from the filing date, while Chapter 7 stays the full 10 years. New credit is harder to get during that time, and lenders who do extend it often charge higher rates. The impact fades as you rebuild positive credit after the discharge.