Distracted driving is highly dangerous, yet the penalties for distracted driving are highly lenient compared to those for drunk driving.
Understanding the different types can be difficult at times and Chapter 11 is perhaps the type of bankruptcy that is the least understood. This may be in part because it is less common than its Chapter 7 or Chapter 13 counterparts. Just what is a Chapter bankruptcy and who can file for it?
Reorganization of debts
The U.S. Courts explains that Chapter 11 is a reorganization of debts. Debtors are given the ability to restructure debts and repay them over a period of time. Commonly filed by businesses, individuals can also file for Chapter 11. If married, a couple may file a joint bankruptcy but one spouse may also file for bankruptcy individually.
Chapter 11 vs. Chapter 13
The reorganization style of a Chapter 11 is akin to that of a Chapter 13 plan. However, Bloomberg BNA reports that Chapter 13 is only available to people or businesses with debts or assets up to a certain threshold. For debtors with larger amounts of debts, Chapter 11 may be an option.
Another benefit of a Chapter 11 plan for some debtors is that it does not limit the amount of time in which the plan must be completed. A Chapter 13 plan cannot last more than 60 months. Similarly, other deadlines throughout the process are more generous with a Chapter 11 plan. For example, Chapter 11 debtors can take more time to create their initial plans once they have filed petitions than what is allowed for Chapter 13 debtors.
Chapter 11 vs. Chapter 7
According to Forbes, one of the biggest differences between Chapter 11 and Chapter 7 bankruptcies is the approach to handling debts overall. In Chapter 7 plans, most debts are eliminated. Debtors may lose assets if they are secured and not protected by exemptions. These assets may be sold in order to repay creditors. It is common for creditors in a Chapter 7 bankruptcy not to be paid anything, especially if debts are unsecured.
A Chapter 11 plan offers businesses and individuals a way to restructure their debts so that the debts can be repaid. Assets are not seized or sold as part of a Chapter 11 bankruptcy.
High asset or high debt help
Individuals or companies facing difficulties with high debt who may be able to benefit from a Chapter 11 bankruptcy should consult with an attorney. Working with someone experienced in this area is an important way of understanding if bankruptcy is the right option and which type of plan best meets the debt-relief needs.