Chapter 11 vs. Chapter 13 Bankruptcy
Chapter 13 and Chapter 11 bankruptcy have certain key similarities that can cause confusion for anyone who doesn’t work in the debt relief industry. They are distinct, however, and you can find a brief description of their differences below.
If you are considering filing for bankruptcy as a business or an individual, we can help.
Experienced Representation To Find The Best Solution For You
With more than 30 years of collective experience, our bankruptcy lawyers have helped clients navigate the path to debt relief and financial freedom. James Monroe has been certified in business and consumer bankruptcy law by the American Board of Certification. Cynthia Lewis is a certified public accountant.
Who Files For Chapter 13 And Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is available for businesses and individuals with a very large amount of debts and income. Chapter 13 bankruptcies are available for almost all individuals as well as sole proprietorships; however, there are debt/income limits for eligibility. These limits change each year.
In Chapter 11 Bankruptcy, Creditors Have A Choice
In both Chapter 11 and Chapter 13 bankruptcy, the debtor and the debtor’s attorney create a plan to reorganize and consolidate all debt. In Chapter 13 bankruptcy, the creditors must accept this plan, provided that it meets certain legal standards. In Chapter 11 bankruptcy, the creditors cast votes to determine whether they will accept or reject the plan.
Under Chapter 11, if the creditors reject the plan, the debtor may come up with a new plan. The judge may also force the creditors to accept the debtor’s plan or the negotiations may simply fail. If the negotiations fail, the business will either have to file for business Chapter 7 bankruptcy, or the case may be dismissed.
Bankruptcy is a complex area of law. Filing for bankruptcy is never easy but, in the end, the rewards are worth the effort. To schedule an appointment for a free initial office consultation, call us at 407-917-4147 or contact our offices online.
We are a debt relief agency. We counsel clients according to federal bankruptcy code.