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Understand the differences between Chapter 11 and Chapter 13 bankruptcy, as well as the income and debt level requirements for both.
Chapter 7 and 13 bankruptcy are designed for individuals, while chapter 11 is typically for businesses. Learn about each and which fits your case.
Chapter 13 bankruptcy may sound similar to Chapter 11 because these both involve repayment plans. But when it comes to Chapter 11 vs. Chapter 13, the biggest difference is that Chapter 13 allows someone with regular income to make an adjustment to how they pay back some debts.
What Else Is Different in a Chapter 13 vs. Chapter 11 Case? Chapter 13 bankruptcy is also called a wage earner’s plan and requires the filer to have regular income because they must be able to make their monthly plan payment. Income can be from employment, a business, or other verifiable sources.
When deciding between Chapter 11 vs. Chapter 13 bankruptcy, consider whether you are filing as an individual or a business, your disposable income, and the qualification requirements for each. If your debts are higher than the allowable debt limits in Chapter 13, you may have to file for Chapter 11.
A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
How Does Chapter 11 Bankruptcy Work? The central element of a Chapter 11 bankruptcy is the creation of a plan to repay creditors all or part of what is owed.