Chapter 13 is a repayment process for eligible individuals with regular income. Chapter 11 is a broader reorganization process used by businesses and some individuals. Both can involve keeping property while restructuring debts, but eligibility, administration, creditor participation, and plan requirements differ substantially. [1][2]
Who can use each chapter?
A corporation or partnership cannot file Chapter 13. An individual operating a business as a sole proprietor may qualify, subject to the current debt limits and other requirements. Chapter 11 can be available to entities and individuals, with special rules and exclusions for particular kinds of debtors. Check the current eligibility statute rather than an old dollar-limit summary. [3]
For example, a salaried homeowner seeking to cure arrears may evaluate Chapter 13. A corporation that wants to continue operating must consider another available chapter; it cannot choose Chapter 13 simply because its debts appear manageable.
Control and plan payments
In Chapter 13, a trustee generally receives scheduled plan payments and distributes them to creditors. Plans usually last three to five years, depending on applicable income rules and other circumstances. Keeping a home can require curing past-due amounts while also making ongoing mortgage payments. [2]
In an ordinary Chapter 11 case, the debtor commonly remains in possession and operates the business under bankruptcy oversight. A proposed plan classifies and treats claims; affected creditors may vote, and the court must find the confirmation requirements satisfied. Appointment of a trustee and special small-business procedures can change that framework. [1]
Choose by the problem you need to solve
- Is the debtor an individual, an entity, or both?
- Which debts are secured, priority, personally guaranteed, or potentially nondischargeable?
- What cash flow can support a feasible plan?
- Does an expiring foreclosure or litigation deadline require immediate advice?
- Would a small-business Chapter 11 procedure apply?
A discharge is not automatic merely because the petition is filed, and both chapters carry continuing disclosure and payment obligations. Compare professional and administrative costs against the actual restructuring objective. Related issues include treatment of an EIDL business loan and why accurate bankruptcy disclosures matter. Bring tax returns, loan records, guarantees, asset valuations, and a realistic budget to the initial consultation.
Primary sources
- U.S. Courts: Chapter 11 Bankruptcy Basics
- U.S. Courts: Chapter 13 Bankruptcy Basics
- 11 USC 109: Eligibility to Be a Debtor
Sources checked: October 31, 2026.