Consumer Bankruptcy Generally

Consumer bankruptcy is a bankruptcy filed by an individual with more non-business debts than business debts. Consumer bankruptcies make up the majority of bankruptcies filed.

A consumer may file a Chapter 7 for an immediate discharge of debt or a Chapter 13 for a payout of debt to the extent possible over the period of 3 - 5 years. Or a consumer may also file a Chapter 11, which is a structured pay-out type bankruptcy without a Chapter 13 Trustee.

Chapter 7 bankruptcies are limited to those who pass the means test, which is a test imposed to ensure that people who make too much money will not be able to obtain a Chapter 7 discharge and will be forced to file a Chapter 13. The means test is not required, however, for those who have more business debt than non-business debt.