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

Chapter 11 and Chapter 13 bankruptcies are two different types of bankruptcy available in Massachusetts. Chapter 11 bankruptcy is usually reserved for businesses or individuals with considerable debt and/or assets. It involves the debtor creating and presenting a restructuring plan to creditors for the restructuring of debts. The plan must be approved by a court, and generally involves the reduction or elimination of some debt, the reorganization of payment plans, and the reorganization of creditors. On the other hand, Chapter 13 bankruptcy is more suitable to individuals with smaller debt amounts who want to repay their debts. It allows individuals to keep their property while paying back creditors over time. This is done through a court-approved payment plan, typically over a period of three to five years. During this period, creditors are not allowed to pursue collection activities or lawsuits and typically must accept payments that are lower than the full amount of the debt. Once the payment plan is completed, the remaining debt is cleared. In summary, the major difference between these two types of bankruptcy is that Chapter 11 involves restructuring debt, while Chapter 13 involves repaying debt. Both have their own advantages and disadvantages, so it is important to discuss your specific situation with a qualified attorney to determine which type of bankruptcy is best for you.

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

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