Bankruptcy Chapters 7, 11 and 13 – What Is The Difference?

Chapter 7 Bankruptcy 

Chapter 7 is generally what people think of when they hear bankruptcy.  

A debtor can dismiss their unsecured debts under Chapter 7 without having to make payments on them. Medical bills, credit cards, personal loans, and some judgments are examples of unsecured debts. In most cases, Chapter 7 allows you to keep both your car and your home. A debtor must be in a specified income bracket to qualify for Chapter 7.

Our team can help you determine if you qualify.


Chapter 13 bankruptcy 

Chapter 13 is a payment plan bankruptcy.  

A debtor can reorganize their finances via Chapter 13. Avoiding foreclosure, catching up on taxes, or even getting better loan repayment terms are all benefits of Chapter 13. In contrast to Chapter 7, the Court will approve a repayment plan of three to five years in Chapter 13. In most circumstances, Chapter 13 is an excellent alternative for those who have too many assets or too much income to qualify for Chapter 7, since it allows you to discharge unsecured debt.

Our team can assess your income and assets to determine which bankruptcy chapter will be most beneficial to you.


Chapter 11 bankruptcy

Chapter 11 is mainly a bankruptcy for businesses.  

Chapter 11 is somewhat similar to Chapter 13. It permits a company to reorganize rather than an individual. The company can then renegotiate its loans for more favorable repayment terms. Chapter 11 allows a company to keep its doors open while avoiding creditor threats. 

When deciding on the best route out of debt for your company, make sure you have a devoted team of attorneys and accountants on your side.


If you have any questions about the topic discussed in this article, or any bankruptcy law matter, please give us a call at Bononi & Company 724-832-2499.


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