What is the difference between chapter 7, 11 and 13 bankruptcy?
In a typical Chapter 7 bankruptcy (also known as liquidation), a trustee collects the nonexempt property of the debtor, converts the property to cash, and distributes the cash to the creditors. In contrast, Chapters 11, 12, and 13 of the Bankruptcy Code contemplate debtor rehabilitation. In a rehabilitation case, creditors look to future earnings of the debtor, not to the current property of the debtor. Under rehabilitation, a debtor will generally retain his assets and property, while making payments to creditors pursuant to a court approved plan.