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

In Pennsylvania, the primary difference between Chapter 7 and Chapter 11 bankruptcy is the type of debt relief they provide. Chapter 7 bankruptcy is a liquidation bankruptcy, and is the most common type of bankruptcy in the state. It is designed to quickly discharge most unsecured debt (credit cards, medical bills, etc.), while still allowing debtors to keep certain assets such as their home or car. Chapter 11 bankruptcy, on the other hand, is a reorganization bankruptcy, and is typically used by businesses or high-income individuals who cannot qualify for Chapter 7 bankruptcy. Rather than discharging the debt, Chapter 11 allows the debtor to reorganize their debt and enter into a repayment plan. This repayment plan allows the debtor to pay their creditors over time, usually over three to five years. In some cases, the debt can be reduced or eliminated. In summary, Chapter 7 bankruptcy allows debtors to quickly discharge unsecured debt while still keeping certain assets, while Chapter 11 bankruptcy allows debtors to reorganize their debt and enter into a repayment plan. Both forms of bankruptcy provide debt relief, but the type of relief they offer is different.

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

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