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

The main difference between Chapter 7 and Chapter 11 Bankruptcy is that Chapter 7 is designed for individuals while Chapter 11 is designed for businesses. In Chapter 7 Bankruptcy, individuals can have their debts discharged in exchange for giving up certain assets, such as the home, car, or other property. This means that creditors are not allowed to seek payment from you for those debts. In Chapter 11 Bankruptcy, businesses can reorganize their debts to be paid off over time. This allows the business to stay in operation while the debts are paid off in a more manageable way. The business can also submit a plan to reduce debts, such as by reducing the amount owed to some creditors or eliminating certain debts altogether. Another difference is that Chapter 7 Bankruptcy is typically a quicker process than Chapter 11 Bankruptcy. Individuals in Chapter 7 Bankruptcy can receive a discharge within a few months, but businesses in Chapter 11 Bankruptcy can be in the process for a year or more. Overall, Chapter 7 Bankruptcy is designed for individuals to have their debts discharged and Chapter 11 Bankruptcy is designed for businesses to reorganize and restructure their debts. Each form of Bankruptcy has different requirements, and it is important to understand the differences before deciding which one to pursue.

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

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