Chapter 11 and its difference from chapter 7 and 13 bankruptcy

This process has the capability to release a person or a business from huge amounts of debts while at the same time giving one a chance to come back stronger. This study will describe Chapter 11 bankruptcy with an attempt to illustrate how it differs from Chapter 7 and Chapter 13 bankruptcy with regards to the inability to settle debts. How does Chapter 11 bankruptcy operate? This type of code involves the idea of reorganization that involves a debtor's assets, business affairs, and debts. The idea behind processing this code is that it allows debtors to restructure their plan while keeping the business running and alive as the debtor pays the creditor over time based on the agreement. It is also possible to request for a relief under this code, especially, individuals and business (Kenton, 2016).

On the other hand, “Chapter 7 and Chapter 13 bankruptcy” represent two different legal debt codes with opposing consequences. However, they have the potential of helping borrowers that are worrying with debt issues. How does Chapter 11 differ from this two codes? Well, first Chapter 7 bankruptcy commonly known as liquidation acts as a legal option for those in debt since it supports full debt clearance or a specified amount. However, it requires that the one in need of support has to surrender assets such as money or property in order to qualify for its benefits (Moran, 2018). Chapter 13 demonstrates a legal option that can help debtors to qualify for a debt discharge. Chapter 11 differs greatly from the other two as it offers support for individuals with huge debts (Kenton, 2016).