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

The main difference between Chapter 7 and Chapter 11 Bankruptcy in South Carolina is the type of debt that is involved. Chapter 7 is known as Liquidation Bankruptcy, and is used when a debtor is unable to pay their unsecured debts such as credit cards or medical bills. The court grants permission to discharge these debts, meaning the debtor no longer has any obligation to pay them. Meanwhile, Chapter 11 Bankruptcy is known as Reorganization Bankruptcy, and is used when a debtor is unable to pay their secured debts such as mortgage or car payments. The court oversees the restructuring of the debt, meaning the debtor can remain current on their payments while working out a repayment plan with creditors in order to satisfy the debt in full. Additionally, Chapter 7 Bankruptcy in South Carolina requires debtors to surrender their property to the court, while Chapter 11 Bankruptcy allows debtors to keep their property. For Chapter 7, the court then sells the property to pay creditors, with any remaining debt then being discharged. However, with Chapter 11 Bankruptcy, debtors maintain ownership of their property and creditors must wait to be paid until the debtor has restructured and made payments on their debt. In summary, the main difference between Chapter 7 and Chapter 11 Bankruptcy in South Carolina is the type of debt involved. Chapter 7 is for unsecured debt, while Chapter 11 is for secured debt. Additionally, Chapter 7 requires debtors to surrender property, while Chapter 11 allows debtors to keep their property.

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

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