Chapter 11 or 13?

Chapter 11 By MAYA DOLLARHIDE Updated October 30, 2021 Reviewed by KHADIJA KHARTIT Fact checked by PETE RATHBURN

What Is Chapter 11?

Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as "reorganization" bankruptcy.

Chapter 13 By LUCAS DOWNEY Updated September 28, 2021 Reviewed by KHADIJA KHARTIT Fact checked by MICHAEL LOGAN

What Is Chapter 13?

Chapter 13 refers to a U.S. bankruptcy proceeding in which debtors undertake a reorganization of their finances under the supervision and approval of the courts. Individuals and married couples, even if self-employed or operating an unincorporated business, are eligible to file for Chapter 13 bankruptcy.1 As part of a Chapter 13 reorganization, which is also known as a wage earner's plan, debtors must submit and follow through with a plan to repay outstanding creditors within three to five years.2 In most circumstances the repayment plan must provide a substantial payback to creditors—at least equal to what they would receive under other forms of bankruptcy—and it must, if needed, use 100% of the debtor's disposable income for repayment.