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

Chapter 7 and Chapter 11 Bankruptcy are both forms of bankruptcy that are offered in the state of Virginia. They are both designed to help individuals and businesses who are struggling financially get out of debt. The main difference between the two is the scope of the filing. Chapter 7 bankruptcy is much more straightforward and applies to individuals who are filing for bankruptcy on their own behalf. It is primarily used to eliminate unsecured debt, such as credit card debt, medical bills, and other types of consumer debt. In a Chapter 7 filing, most of the debtor’s assets are liquidated and the proceeds are used to pay off debts. Chapter 11 bankruptcy, on the other hand, is much more complex. It is typically used by businesses, but can also be used for individuals. It allows the debtor to reorganize their debts and restructure their finances, instead of having to liquidate assets. It also provides the debtor with more time to make payments. Both Chapter 7 and Chapter 11 bankruptcy filings involve complex legal procedures and should be handled with the help of a qualified bankruptcy attorney. They both require the debtor to make certain financial disclosures, such as providing tax returns and income statements, and can take several months to be processed. In addition, the types of debts that can be discharged in a bankruptcy depend on the type of filing.

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

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