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

A Chapter 11 and a Chapter 13 bankruptcy are both types of reorganization bankruptcy. Chapter 11 is geared towards businesses and corporations that have large amounts of debt and are unable to pay them off. The goal of a Chapter 11 is to create a plan for the business to be restructuring andrepayment of creditors while the business continues to operate. This type of bankruptcy is usually used when a business is at risk of facing liquidation, and can be very complex. A Chapter 13 bankruptcy is geared more towardsindividuals. This type of bankruptcy reduces or eliminates debts and creates a payment plan that the debtor can follow. The payment plan is designed to repay creditors over a 3-5-year period. All unsecured debts, such as credit card bills, medical bills, and personal loans, can be covered in the Chapter 13 bankruptcy. This type of bankruptcy is more manageable for individuals, as it allows them to keep their assets and provides them with a more structured repayment plan. Thus, while a Chapter 11 and a Chapter 13 bankruptcy both involve restructuring debt and repaying creditors, the primary difference is that a Chapter 11 is mainly for businesses and a Chapter 13 is more suited for individuals. The Chapter 11 usually involves more complex legal matters and a larger restructuring process and is generally more expensive than a Chapter 13. Chapter 13 allows individuals to keep their assets and structure a repayment plan, whereas Chapter 11 allows businesses to reorganize and keep their assets while finding a way to repay their creditors. It is important to understand the differences between these two as the bankruptcy process in Rhode Island can be complicated.

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

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