What does chapter mean in Chapter 7 bankruptcy and Chapter 13 bankruptcy?

There are six types of bankruptcy under the Bankruptcy Code, which is contained in Title 11 of the United States Code. The term chapter refers to the particular, appropriate section, or chapter, of the federal Bankruptcy Code.

The three most common for personal bankruptcy are Chapter 7, which is for the basic liquidation for individuals and businesses; Chapter 11, which is rehabilitation or reorganization, used primarily by business debtors but sometimes by individuals with substantial debts and assets; and Chapter 13, which is a rehabilitation payment plan for individuals with a regular sources of income.

Of these three, the most commonly used for personal bankruptcy are
what is called "liquidation bankruptcy" (Chapter 7 bankruptcy) and what is called "reorganization of debt bankruptcy" (Chapter 13 bankruptcy). As many as 65 percent of all U.S. consumer bankruptcies are Chapter 7s.

The selection of the appropriate chapter is one of the first reasons why a person filing for bankruptcy needs a lawyer.