What is the difference between Chapter 7 and Chapter 11 Bankruptcy?

The difference between Chapter 7 and Chapter 11 Bankruptcy in North Dakota is the type of debt and how it is handled. Chapter 7 Bankruptcy is typically used as a “liquidation” bankruptcy, which means that an individual’s assets are sold off to pay the debt in full. This type of bankruptcy typically affects unsecured debt such as credit card debt, medical bills, and any other type of debt that is not secured. Once the debts are paid, the debtor is no longer responsible for them. Chapter 11 Bankruptcy, sometimes called a “reorganization” bankruptcy, is typically used by businesses to restructure the debt and typically affects secured debt. This includes secured debt such as mortgages and car loans, as well as unsecured debt. Under this type of bankruptcy, the business can restructure its debt in order to pay it back over a longer period of time, using a court-approved repayment plan. In contrast to Chapter 7 Bankruptcy, Chapter 11 Bankruptcy does not require a debtor to liquidate assets in order to pay the debt in full. This type of bankruptcy is beneficial for businesses that are still operative and need to restructure their debts in order to remain profitable and competitive. Overall, the differences between Chapter 7 and Chapter 11 Bankruptcy in North Dakota are the types of debt and how they are handled. Chapter 7 Bankruptcy is a liquidation bankruptcy used to pay off unsecured debt while Chapter 11 Bankruptcy is a reorganization bankruptcy used to restructure secured and unsecured debts.

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What is the difference between Chapter 7 and Chapter 11 Bankruptcy?

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