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

Chapter 11 and Chapter 13 bankruptcies both offer debt relief to individuals and businesses, but there are some key differences between the two. Chapter 11 is considered the more complex of the two chapters, and it is usually used by businesses to reorganize their financial obligations. It involves a longer process because the debtor must come up with a plan to repay their debts over a specific amount of time. Chapter 13 bankruptcies are largely used by individuals and involve more direct financial debt restructuring. Under this chapter, the debtor typically proposes a repayment plan that lasts between three and five years. This plan outlines how much money the debtor will pay back to creditors and within what timeframe. Overall, Chapter 11 bankruptcies tend to be more expensive and complicated than Chapter 13 bankruptcies, although both offer debt relief from creditors. With Chapter 11, the debtor must come up with a repayment plan that the court must approve, while in Chapter 13, the repayment plan is proposed by the debtor and typically does not require court approval. Additionally, Chapter 13 is often a better option for those who have a regular income, since it allows them to spread out their payments over a period of time and keep most of their property.

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

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