What is the difference between Chapter 7 and Chapter 11?

Chapter 7 and Chapter 11 are two different types of bankruptcy law in Mississippi that allow individuals and businesses to file for bankruptcy in order to manage their debts. Chapter 7 bankruptcy is also known as liquidation bankruptcy because it allows the debtor to sell their assets in order to pay their creditors. The debtor is then discharged from all of their unsecured debts. Chapter 11 bankruptcy is a type of reorganization bankruptcy that is available to both businesses and individuals. The main purpose of Chapter 11 is to help the debtor pay back their debts over time while still allowing them to keep their assets and keep running their business operations. During the Chapter 11 process, the debtor proposes a plan to the creditors and the court to pay back all or a portion of their debts. The plan must be accepted by the creditors and approved by the court in order for it to be put in place. The main difference between Chapter 7 and Chapter 11 is that in Chapter 7 the debtor is not allowed to keep any of their assets while in Chapter 11 they are. Additionally, in Chapter 7 the debtor is discharged of all their unsecured debts while in Chapter 11 they must pay them back over time. Finally, Chapter 7 is more of a liquidation process while Chapter 11 is more of a reorganization process.

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