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

The difference between a Chapter 11 and Chapter 13 bankruptcy in Delaware is found in the type of debt relief they provide. Chapter 11 bankruptcy provides a business or individual with the opportunity to reorganize their debt and restructure debt repayment plans. This type of bankruptcy is typically used by businesses who wish to attempt to remain in operation such as those affected by the COVID-19 pandemic. Chapter 13 bankruptcy is meant for individuals and is intended to provide debt relief through a repayment plan set up by the court. Unlike Chapter 11, Chapter 13 does not involve restructuring or reorganizing debt. Instead, a repayment plan is created that sets a timeline for debt repayment. This repayment plan can last anywhere from 3-5 years and is typically based on the individual’s income and ability to repay their debts. The main difference between these two types of bankruptcy is that Chapter 11 is used for businesses while Chapter 13 is used for individuals. Chapter 11 provides debt relief through restructuring and reorganization whereas Chapter 13 provides debt relief through a repayment plan. Both of these forms of bankruptcy are options available to those in Delaware looking for debt relief.

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

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