Bankruptcy has been an integral part of the American legal system since shortly after the United States declared its independence. Several different versions of bankruptcy have been enacted, amended, modified, repealed and replaced since Congress first passed a Bankruptcy Act in 1800.

Today, the bankruptcy provisions and procedures we use are those first enacted by the Bankruptcy Reform Act of 1978, as amended and modified by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”).

The Bankruptcy Code provides for six (6) different kinds of bankruptcy:

  1. Chapter 7 – Often called a “Straight Bankruptcy” or “Liquidation”.
  2. Chapter 9 – The reorganization of the debts of a municipality.
  3. Chapter 11 – The reorganization of the debts of a business entity or certain individuals.
  4. Chapter 12 – The reorganization of the debts of a person who runs a family-owned farm or a family-owned fishing business.
  5. Chapter 13 – The reorganization of debts of an individual with regular income.
  6. Chapter 15 – Deals with foreign companies which have U.S. debts.

In South Carolina, individual debtors usually file a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, although there have been a few individual Chapter 11 filings in the last 25 years; there have been no Chapter 12 filings in several years.