• In the United States, the federal code has regulations concerning individual and corporate bankruptcy. Title 11 of the federal code contains laws relating to bankruptcy, and there are six different types of bankruptcy recognized by federal law. The different types of bankruptcy are known by the chapters that describe them under Title 11 of the federal code, and the circumstances leading an individual or business to file for bankruptcy will dictate which type of bankruptcy to file for.
  
  

Chapter 7 Eligibility

• Chapter 7 bankruptcy involves the complete liquidation of an individual's or a business's assets. Sale of the assets is used by the bankruptcy administrators to pay creditors having a claim against the individual or business filing for bankruptcy. Titles 11-109(g), and 11-362(d) and (e) list circumstances in which an individual may not file for Chapter 7 bankruptcy. If the debtor wishing to file for Chapter 7 bankruptcy has had a previous petition for bankruptcy of any kind rejected by the court in the previous 180 days, due to the debtor not complying with court orders, or voluntarily withdrawing the bankruptcy application, then the debtor is not allowed to file for Chapter 7 bankruptcy. The reason an individual might want to file for Chapter 7 bankruptcy is because once debts are discharged following a court hearing, the debtor is no longer responsible for them, and may make a fresh start. The total discharge of responsibility from any or all debts is not available to businesses filing for Chapter 7 bankruptcy.
  
  

Chapter 11 - Debtor In Possession

• Businesses and individuals can file for Chapter 11 bankruptcy when they do not want all of their assets to be disposed of. Chapter 11 bankruptcy is designed to allow for a reorganization of the debt and debt repayment schedules, while allowing debtors to retain control of their assets. When a debtor files for Chapter 11 bankruptcy, the debtor becomes known as the "debtor in possession." This means that the debtor keeps possession of all property while a debt reorganization plan is put together and agreed to. This allows a business, for example, to continue to trade until the debtor's repayment plan is confirmed, or the bankruptcy is converted to a Chapter 7 bankruptcy, when the assets are then disposed of to pay, or partially pay, the creditors. These provisions are detailed in Title 11-1101 of the federal code.
  
  

Chapter 13

• For some individuals, filing for bankruptcy under Chapter 13 of the federal code has some advantages over a filing under Chapter 7. One such advantage for an individual debtor is that Chapter 13 offers the chance to save a family home from foreclosure. Individuals are still responsible for meeting mortgage repayments, but outstanding payments can be rescheduled, and repaid in set amounts over an agreed period of time. According to title 11-109(e), Individuals can only file for bankruptcy under Chapter 13 if they have secured debts, such as a mortgage, of less than $1,081,400, and unsecured debts of less than $360,475.