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

Chapter 11 and Chapter 13 bankruptcies are different procedures established by the United States Bankruptcy Code to help people dealing with debt. In Nebraska, both are available options, and the type of bankruptcy you choose depends on your financial situation and the circumstances of your case. Chapter 11 bankruptcy, sometimes referred to as “business bankruptcy,” is designed for reorganizing debt to allow businesses, partnerships, and individuals to manage their debt without having to complete liquidation. During the filing process, the court will put a stay on any existing creditors and debtors. This allows the filer to establish payment plans to pay off their debts over a period of time. On the other hand, Chapter 13 bankruptcy is primarily intended for individuals with regular income, such as wages, salaries, commissions, royalties, etc. It allows individuals to reorganize their debts and enter into a 3-5 year repayment plan with their creditors, with the court’s approval. During this time, the filer must commit to making payments on a regular basis. In summary, the key difference between these two types of bankruptcy is that Chapter 11 is designed for businesses, while Chapter 13 is only for individuals. Furthermore, while Chapter 11 bankruptcy allows the filer to enter into repayment plans for their debt, Chapter 13 requires the filer to commit to debt payments for a set amount of time.

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

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