Other Types of Bankruptcy
Since the other types of bankruptcies are specifically geared toward certain individuals or businesses, most people only qualify for Chapter 7 or Chapter 13. Below is an overview to show how they're different.
Chapter 9 bankruptcy is another repayment plan that allows towns, cities, school districts, etc. to reorganize and pay back what they owe.
Chapter 11 Bankruptcy
For the most part, Chapter 11 bankruptcy is used to reorganize a business or corporation. Businesses come up with a plan for how they’ll continue operating the company while paying off their debt, and both the court and the creditors must approve this plan. Some individuals, such as real estate investors, who have too much debt to qualify for Chapter 13, but who also have a lot of high-value properties and assets, may also choose to file under Chapter 11.
Sub V Bankruptcy
Known as "The new small business bankruptcy" Chapter 11 bankruptcy gives businesses the chance to restructure and reorganize their debt over three and five years while continuing to operate. However, a Chapter 11 filing is often too complex and expensive for many small business owners. Subchapter 5 was added to Chapter 11 of the U.S. Bankruptcy Code in 2019 to make reorganization bankruptcies more accessible to small businesses. The subchapter went into effect in 2020. It gives small businesses that are earning a profit, but having trouble paying their obligations, a simplified process for paying down their debt. There are many rules and hidden costs that should be considered.
This is a repayment plan that allows family farmers and fisherman to avoid having to sell all their stuff or foreclose on their property. While it’s similar to Chapter 13 bankruptcy, Chapter 12 is a little more flexible and has higher debt limits.
Chapter 15 deals with international bankruptcy issues and gives foreign debtors access to U.S. bankruptcy courts.