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Comparing a Chapter 11 Bankruptcy to a Chapter 13 Bankruptcy

Here we compare a chapter 11 bankruptcy to a chapter 13 one. We look at how they are the same and also the ways in which they differ.

You have probably heard of a chapter 11 bankruptcy as well as a chapter 13 bankruptcy but you may be confused as to how the two types of bankruptcies are the same and how they are different. Both of these bankruptcies have similarities that can be confusing to anyone who does not work in the legal field or who does not have any dealings with the industry that is involved with debt relief.

If you are contemplating your options in terms of bankruptcy, whether as an individual or as a business, then you need to be clear about what a chapter 11 bankruptcy is and what sets it apart from the chapter 13 bankruptcy.

The chapter 11 bankruptcy is geared towards individuals as well as businesses that have both a large income as well as a considerable amount of debts. On the other hand, chapter 13 bankruptcies are available for almost any person to file for and can also be used for sole proprietorships. The latter is such that to be eligible you must qualify for the debt/income limits for that given year. Please note that the debt/income limits change on an annual basis. If you decide to apply for a chapter 13 bankruptcy then you need to find out what these limits are before you take a step further in the filing process.

With both these types of bankruptcies both the debtor as well as the lawyer that has been hired work together to come up with a suitable plan that will enable all debts that are owing to be reorganized and consolidated. If a person decides to files for a chapter 13 bankruptcy then the creditors must accept the plan that has been worked out, as long as it meets the legal standards that govern it. On the other hand, for those who choose to file for a chapter 11 bankruptcy, the creditors can look over the plan and then can vote on it to decide whether they wish to accept the plan or reject it. In this case the creditors are given a choice while in the chapter 13 bankruptcy they must decide to accept the planArticle Submission, even if they do not want to.

If the plan the debtor and the attorney came up with for a chapter 11 bankruptcy is rejected by the creditors then the two people can go back to the drawing board and create a new plan. However there may be instances where a judge will put pressure on the creditors (i.e. force them) to accept the plan that has been proposed. There are other times when the negotiations simply do not come together as hoped. If the negotiations turn out to be a complete failure because no one is able to agree then if it is a business that wishes to file for bankruptcy they will have to do so under the chapter 7 bankruptcy which is meant for businesses.




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ABOUT THE AUTHOR


Don't let money problems hold you down, talk to a Boston chapter 11 bankruptcy today. For a lawyer you can count on, visit: www.bankruptcyattyboston.com.



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