Which bankruptcy chapter is typically used for individuals rather than businesses?

Chapter 13 bankruptcy is specifically designed for individuals who have a regular income and want to reorganize their debts while retaining their property. This chapter allows individuals to create a repayment plan, which can last from three to five years, enabling them to pay off all or a portion of their debts over that period.

In contrast to Chapter 7, which focuses on liquidating assets to pay creditors and is available to both individuals and businesses, Chapter 13 is tailored for personal financial reorganization. Chapter 11 primarily serves as a restructuring option for businesses, though individuals can use it in certain circumstances. Chapter 12 is specifically intended for family farmers and fishermen, making Chapter 13 the most suitable option for average consumers seeking relief from debt.