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

Chapter 7 and Chapter 11 Bankruptcy are two different types of bankruptcy laws in New Hampshire. Chapter 7 Bankruptcy is also known as a “liquidation bankruptcy” and is the most common form of bankruptcy. It provides relief for individuals and businesses who are unable to pay their debts. With Chapter 7, all non-exempt assets are sold in order to pay off creditors. In addition, the court can also discharge certain types of debts that are not eligible for repayment. Chapter 11 Bankruptcy, commonly known as a “reorganization bankruptcy”, is used primarily by businesses. It allows a business to restructure their debts so that they can continue their operations. In Chapter 11, a business creates a repayment plan for its creditors and the court must approve it before it can go into effect. This plan outlines how and when the business will repay its debts. Once the plan is approved, it must be followed until the debts are paid in full. In conclusion, the main difference between Chapter 7 and Chapter 11 Bankruptcy is that Chapter 7 is designed for individuals and businesses who are unable to pay their debts while Chapter 11 is designed for businesses who wish to reorganize their debt.

Related FAQs

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

Related FAQs

Related Blog Posts