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

When individuals in California are unable to pay their debt, they may be able to file for bankruptcy under the Bankruptcy Code. The two most common types of bankruptcy for individuals are Chapter 11 and Chapter 13. Chapter 11 bankruptcy is usually resorted to by businesses, as it involves reorganizing the company’s finances in order to pay off its creditors over time. The process is supervised by the bankruptcy court, and the company is allowed to remain in business while the reorganization plan is put into action. On the other hand, Chapter 13 bankruptcy is what an individual would file if they have a regular source of income and can afford to pay a certain portion of their debts. With this type of bankruptcy, the individual will need to have a repayment plan approved by the court, which outlines how they will pay back their creditors over the course of three to five years. So, the key differences between Chapter 11 and Chapter 13 bankruptcies are that Chapter 11 is usually filed by businesses, while Chapter 13 is usually filed by individuals. In Chapter 11, the process involves reorganizing a company’s finances and supervising the plan by the court, while Chapter 13 requires the individual to submit a repayment plan and pay back their creditors over a period of three to five years.

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

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