While most consumers might be familiar with Chapter 7 bankruptcy, it's not the end-all, be-all of bankruptcy in the U.S.
While Chapter 7 bankruptcy forgives a majority of unsecured debt, the lesser-known chapter 13 bankruptcy allows a consumer to keep their assets and repay their debts over a three- to five-year period.
For a full breakdown of the ways Americans are calling it quits on debt, see the infographic below:
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You hear about major companies filing for bankruptcy, but what is the bankruptcy landscape really like?
How have people and businesses been holding up?
Here's a look at the general status of bankruptcy in this country.
Which type is filed the most?
Chapter 7 Debt Discharge: Allows trustee to sell debtors non-exempt assets so the debts can be repaid as much as possible. All other eligible debts that can't be paid for through liquidation are wiped away. For companies, business operations would have to cases. Corporations, partnerships, and individual people are eligible.
Chapter 13 Repayment Plan: Debtor can keep his or her assets. A 3 to 5 year repayment plan is worked out. Individual people are eligible.
Other: A well-known chapter in this category is Chapter 11. Similar to Chapter 13, but mainly for businesses. Reorganization plan is established to help pay creditors. Businesses and some individuals are eligible.
How many are filed?
In 2011, there were about 1.4 million bankruptcy filings.
Filings fell almost 12% from 2010 to 2011.
Declines were seen in both Chapter 7 and Chapter 13 bankruptcies.
When thinking about bankruptcy, remember that there are different ways to file depending upon a person or company's situation.
For more information on the state of personal bankruptcies in the United States, check out our report on the demographics behind bankruptcy filers.