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 Hawaii is how the debts are handled. In a Chapter 11 bankruptcy, the person filing for bankruptcy is allowed to reorganize their debt and create a payment plan with their creditors that works for both parties. This plan may involve reducing the amount owed, restructuring the payments, or even eliminating certain debts. In contrast, a Chapter 13 bankruptcy requires the person filing to create a repayment plan that will be overseen by a bankruptcy trustee. This plan must last three to five years and requires the debtor to pay a portion of their debts each month. After the repayment plan is complete, the remaining debt is discharged, meaning the person filing is no longer responsible for those debts. Chapter 11 bankruptcies are typically used by businesses and those with a large amount of asset and debt. Chapter 13 bankruptcies are more common for individuals who have a steady income. They are given the opportunity to keep their assets, such as their home or car, and have the chance to keep up with their payment plans. Ultimately, the main difference between a Chapter 11 and a Chapter 13 bankruptcy in Hawaii is the way the debts are handled. Chapter 11 bankruptcies offer more freedom to restructure debt, while Chapter 13 bankruptcies are designed to give debtors the chance to repay their debts in a more manageable way.

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

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