Chapter 11 Vs. Chapter 13 Bankruptcy


Chapter 11 and Chapter 13 bankruptcy proceedings involve the filing of petitions in federal court for debt relief.


  • A Chapter 11 bankruptcy allows a corporate debtor to stay in business while restructuring its debt. A Chapter 13 bankruptcy permits an individual to enter into a court-approved plan to repay debts.


  • A Chapter 11 debtor is a partnership, sole proprietorship or a corporation. A Chapter 13 debtor is an individual who has regular income with secured and unsecured debt.

Repayment Procedure

  • Chapter 11 bankruptcy allows a debtor to restructure the payment of its debts according to a court-confirmed, creditor-approved plan. Chapter 13 bankruptcy permits an individual to keep his property and follow a court-approved plan to make regular payments to a trustee over three to five years.


  • A business that doesn't have enough funds after liquidating its assets to pay creditors may have to fold. In some cases, individual partners may have to file personal bankruptcy to satisfy partnership debt obligations. Creditors in a Chapter 13 bankruptcy can object to a court-approved plan.


  • Individual corporate stockholders are protected in a Chapter 11 bankruptcy. Chapter 13 protects individuals from foreclosure. The court approves a Chapter 13 plan, not the creditors.


  • Photo Credit
Promoted By Zergnet



You May Also Like

Related Searches

Read Article

10 Most Needed Jobs in the Future

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!