• Chapter 13 bankruptcy sets up a payment plan to satify an individual's debts.Bankrupt. Businessman with empty pockets (with clipping paths) . image by Vitaliy Pakhnyushchyy from Fotolia.com
  
  Debtor seeking relief from bankruptcy must file their cases in federal court, since these courts have exclusive jurisdiction in bankruptcy cases. Federal bankruptcy laws are intended to give debtors a fresh start while also respecting the right of creditors if the debtor has enough assets to satisfy or partially satisfy the debt.
  
  

Chapter 13

• Chapter 13 of U.S. Bankruptcy Code allows individuals with a regular income to discharge all or part of their debts by setting up an installment payment plan. The installment payment will take place over a period of three to five years. Creditors are forbidden from continuing collection efforts while the plan is in effect. Eligible individuals must have unsecured debts of less than $360,475 and secured debts of less than $1,081,400, according to the United Sates Code.
  
  

Chapter 7

• Chapter 7 of the U.S. Bankruptcy Code allows a debtor, with some exceptions, to completely discharge her debts rather than set up a repayment plan. Under chapter 7, a bankruptcy court trustee will collect the debtor's nonexempt assets and distribute them to his creditors. Since the Bankruptcy Code allows states to use its own list of exemptions in place of the exemptions provided by federal law, an individual should research the bankruptcy laws of her state to discover what property is exempted before filing under chapter 7.
  
  

Chapter 11

• Corporations, partnerships and sole proprietors may file for bankruptcy under chapter 11 of the U.S Bankruptcy Code. The main purpose of chapter 11 is to give business entities the opportunity to reorganize their debts on a more manageable schedule. A corporation filing under chapter 11 does not put the personals assets of its stock holders (the corporation's owners) at risk of seizure by creditors. However, creditors may claim the personal assets of a sole proprietor. In partnerships, the personal assets of the partners are at risk in some cases.
  
  

Chapter 15

• Chapter 15 of the U.S. Bankruptcy Code is intended to deal with situations concerning debtors and assets involving more than one nation. Typically, chapter 15 cases are secondary to primary cases brought in a foreign country. The person filing under chapter 15 is called the "foreign representative" (often a creditor) who requests that the court recognize a foreign legal proceeding. Once the foreign proceeding is recognized, the foreign representative may continue his legal efforts under the U.S Bankruptcy Code.