What is the difference between a Chapter 11 and a Chapter 13 bankruptcy?

The main difference between a Chapter 11 and a Chapter 13 bankruptcy in Arkansas, is the goal of each type of bankruptcy. A Chapter 11 bankruptcy is generally used by business owners who want to reorganize their finances. It is used when a business is unable to pay its debts and needs assistance reorganizing them. Under a Chapter 11, a business will submit a plan to a court for debt repayment, which will allow the business to continue running and pay back creditors over time. Meanwhile, Chapter 13 bankruptcy is more commonly used by individuals to help them reorganize their personal finances. Unlike Chapter 11, which is focused on businesses, Chapter 13 is designed specifically for individuals. It allows the individual to enter into a payment plan with creditors to settle their debts over a period of up to five years. During the payment plan, creditors are forbidden from collecting on the debt, but the debtor must still make payments to the court. At the end of the payment plan, any remaining debt will be discharged. In summary, a Chapter 11 bankruptcy is used by businesses to reorganize their finances, while a Chapter 13 bankruptcy is used by individuals to reorganize their personal finances. Both types of bankruptcy allow debtors to repay their debt in a structured way, but the goal of each type is slightly different.

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What is the difference between a Chapter 11 and a Chapter 13 bankruptcy?

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