Chapter 11 and Chapter 13 Bankruptcies

May 16, 2012 by  Filed under: Bankruptcy 

Not everyone who wants to file bankruptcy wants to simply eliminate debt. Some people, through a series of circumstances, find themselves in a situation in which the amount of money required to meet the minimum payments on all of their debts exceeds their income. For these people, a new start may simply mean an opportunity to keep creditors at bay while they get their finances back in order. For these people, a chapter 7 or 11 bankruptcy is often the best solution.


Chapter 11 is essentially a debt reorganization that enables companies to remain in business as long as all of the conditions of their bankruptcy are consistently met. It offers the most breathing room of any bankruptcy plan for those companies who are truly interested in salvaging their business. At the same time, it’s also one of the riskiest forms of bankruptcy because if a company is not able to turn its financial situation around, it will still fail and its assets will be liquidated. Many chapter 11 bankruptcies fail.

Chapter 13 is similar to chapter 11. However, it’s more structured in its moderation and execution. Individuals as well as business owners or partners may apply for this type of protection as well. This type of bankruptcy allows those who are interested in repaying their debt to consolidate it into a more manageable payment that is supervised by the courts. A specific amount of time is set for the complete repayment of the debt, and once everything is satisfied, the court removes itself from the situation. Those who own businesses or are part of a partnership favor this type of filing when their business goes through a rough time because it protects their personal assets.

Although both types of filings ultimately offer their own set of pros and cons, particularly for business owners, the success of re-emerging from either greatly depends on being able to meet a specific payment plan.

Choosing Which Is Right

Either filing may be right for those who wish to seek court protection from collection efforts by creditors while they reorganize their finances and attempt to pay down their debt. These types of filings are more or less reform programs that allow filers to maintain possession of assets and typically affect the typical day to day lives of filers the least of other types of bankruptcies. Chapter 11 or 13 is also a good solution for those who have been traditionally financially stable, but have encountered some type of situation that threatens that stability either temporarily or long-term.

Christopher M, of Lee Law Firm, understands that financial hardships can affect honest, hard-working people. His early experience growing up in a very blue collar family in a rural area of Indiana, made a significant impression on his business philosophy today. As a child, he watched his family struggle as money didn’t come easy and his parent work hard to provide for their family. As a bankruptcy attorney in Dallas, Tx his practice has given him the opportunity to directly impact the lives of many people. For more information visit:

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