Chapter 11 and Chapter 13 bankruptcy both let you reorganize debt and keep property, but they answer different problems. Chapter 13 is a court-supervised repayment plan for individuals with regular income and debts under set ceilings; it runs three to five years and costs a few thousand dollars. Chapter 11 is a more flexible reorganization designed for businesses, and for individuals whose debts are too large for Chapter 13; it costs far more and takes longer. The right choice usually comes down to who you are (business or individual), how much you owe, and whether your income can support a fixed plan. Here is how Chapter 11 vs. Chapter 13 bankruptcy compares on the points that actually decide the question.
Who Can File Each One
Chapter 13 is limited to individuals with regular income. To qualify, your noncontingent, liquidated unsecured debts must be below $526,700 and your noncontingent, liquidated secured debts below $1,580,125.1Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor Those thresholds took effect April 1, 2025 and hold through March 31, 2028. You also need enough steady income to fund a repayment plan lasting three to five years, which is why Chapter 13 is sometimes called a “wage earner’s plan.”2United States Courts. Chapter 13 – Bankruptcy Basics
Chapter 11 is open to almost any business entity and to individuals whose debts are too large or too complicated for Chapter 13. Corporations, partnerships, and sole proprietors all file under Chapter 11, and there is no cap on the amount of debt involved. If your debts blow past either Chapter 13 ceiling, Chapter 11 is the alternative by default.
Who Controls the Assets
In Chapter 11, the business typically keeps running. The debtor stays in control of its assets as a “debtor-in-possession,” with no outside trustee managing day-to-day operations unless the court finds fraud, dishonesty, or gross mismanagement. The debtor-in-possession can use, sell, or lease property of the estate, though significant transactions need court approval.3United States Courts. Chapter 11 – Bankruptcy Basics
Chapter 13 works differently because the debtor is almost always an individual protecting personal property. You keep your home, your car, and your other assets while making payments under a court-approved plan. This is one of the strongest reasons people choose Chapter 13 over Chapter 7: if you’ve fallen behind on mortgage payments, the plan lets you catch up over time without losing the house. A bankruptcy trustee oversees your payments but does not take possession of your property.2United States Courts. Chapter 13 – Bankruptcy Basics
How the Repayment Plan Works
Chapter 11 plans are custom-built and can be extraordinarily flexible. The debtor has an exclusive 120-day window after filing to propose a reorganization plan. If the debtor misses that window, or fails to secure creditor acceptance within 180 days, other parties can file competing plans.4Office of the Law Revision Counsel. 11 U.S. Code 1121 – Who May File a Plan The plan itself might cut total debt, lower interest rates, stretch out payment schedules, or convert debt into equity in the reorganized company. There is no fixed repayment period. The trade-off is complexity: drafting and confirming a Chapter 11 plan routinely takes six months to over a year, and contested cases run much longer.
Chapter 13 plans are far more standardized. The repayment period is three years if your income is below the state median for your household size, and five years if it is above. The court will not approve a plan shorter than three years or longer than five.2United States Courts. Chapter 13 – Bankruptcy Basics Your payment amount is based on “disposable income,” meaning your current monthly income minus what you reasonably need for living expenses, domestic support obligations, and (if applicable) business operating costs.5Office of the Law Revision Counsel. 11 U.S. Code 1325 – Confirmation of Plan Above-median filers have those expenses calculated using means-test standards rather than actual spending, which can push the required payment higher.
Priority debts like domestic support obligations and certain tax debts must be paid in full through either type of plan. Secured debts such as car loans can sometimes be restructured in Chapter 13, and unsecured creditors receive whatever disposable income allows over the plan’s life.
What Creditors Can Do
Creditors have real leverage in Chapter 11. The court may appoint an official committee of unsecured creditors to negotiate with the debtor over the reorganization plan. Creditors whose rights are being altered under the plan get to vote, and the plan typically needs acceptance by at least one impaired class before the court will confirm it.3United States Courts. Chapter 11 – Bankruptcy Basics Even when the required votes fall short, the court can force confirmation through a process called “cramdown,” but only if the plan meets strict fairness requirements. This back-and-forth is a major reason Chapter 11 cases take so long and cost so much.
In Chapter 13, creditors play a much smaller role. They are notified of the filing and can object to the proposed plan, but there is no creditors’ committee and no formal vote. The bankruptcy trustee handles most creditor interactions. Once the court confirms the plan, creditors are bound by its terms and largely step out of the picture.
What Each Chapter Costs
Chapter 11 is expensive, and that fact alone pushes many smaller cases toward other options. The filing fee is $1,738, including a $571 administrative fee.6United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Attorney fees for a standard Chapter 11 case commonly run from tens of thousands of dollars into six figures, depending on the size of the business and how aggressively creditors contest the plan. Chapter 11 debtors also owe quarterly fees to the U.S. Trustee for every quarter the case remains open. Effective April 1, 2026, those fees start at $250 per quarter when disbursements are below $62,625 and scale upward, reaching a cap of $250,000 per quarter for the largest cases.7United States Department of Justice. Chapter 11 Quarterly Fees The fees keep accruing until the court enters a final decree, converts the case, or dismisses it.
Chapter 13 is dramatically cheaper. The filing fee is $313, including a $78 administrative fee.6United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Attorney fees for a standard Chapter 13 case typically fall between $4,000 and $7,000, and many courts set a “no-look” fee the attorney can charge without itemizing every hour of work. Those legal fees are usually folded into the repayment plan, so you are not paying them all upfront.
When You Get a Discharge
When a Chapter 11 plan is confirmed, the debtor is generally discharged from all debts that arose before the confirmation date.8GovInfo. 11 USC 1141 – Effect of Confirmation For business entities, that discharge happens at confirmation, which is one of the appeals of Chapter 11. For individual debtors in Chapter 11, however, the discharge is delayed until all plan payments are actually completed, the same way Chapter 13 works.
Chapter 13 discharge happens once you finish every payment under your three-to-five-year plan. At that point, most remaining unsecured debts are wiped out, including credit card balances and medical bills.
Both chapters share the same list of debts that survive bankruptcy under 11 U.S.C. ยง 523. You cannot discharge domestic support obligations, recent income taxes or taxes on unfiled or fraudulent returns, government-backed or nonprofit student loans (absent proof of undue hardship), debts obtained by fraud or false financial statements, damages for willful and malicious injury, liability for death or personal injury from drunk driving, or criminal fines and penalties owed to a government entity.9Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge
Subchapter V: The Middle Ground for Small Businesses
If you run a small business, standard Chapter 11 may be more expensive and complex than the situation requires, and Chapter 13 is unavailable to entities. Subchapter V of Chapter 11, created by the Small Business Reorganization Act, streamlines the process for businesses with aggregate secured and unsecured debts (excluding debts owed to insiders) at or below roughly $3 million, a threshold adjusted periodically for inflation.10United States Department of Justice. Subchapter V – U.S. Trustee Program
Subchapter V strips out some of the costliest features of traditional Chapter 11. There is no unsecured creditors’ committee unless the court finds a special reason to appoint one. A standing trustee is always assigned, but that trustee acts as a facilitator rather than an operator. You do not need creditor votes to confirm the plan if it meets certain legal requirements, and administrative expenses like legal fees can be spread over the life of the plan rather than paid in full on confirmation. For qualifying businesses, Subchapter V often delivers Chapter 11’s flexibility without Chapter 11’s price tag.
If You Can’t Finish the Plan
Not every reorganization succeeds. A Chapter 13 debtor can voluntarily convert to a Chapter 7 liquidation at any time, and no court can take that right away.11Office of the Law Revision Counsel. 11 USC 1307 – Conversion or Dismissal You can also ask the court to dismiss the case entirely. Beyond voluntary action, the court can convert or dismiss a Chapter 13 case on its own if you default on plan payments, fail to file required tax returns, miss domestic support obligations, or cause unreasonable delays that hurt creditors.
If circumstances beyond your control prevent you from finishing, Chapter 13 offers a hardship discharge. The court can grant one if you have already paid creditors at least what they would have received in a Chapter 7 liquidation and modifying the plan is not practical. A hardship discharge covers fewer debts than a standard Chapter 13 discharge.
Chapter 11 cases can also be converted to Chapter 7 or dismissed, typically when the business cannot realistically reorganize: continued losses, failure to file a plan, or inability to get creditor approval. Because conversion often means the business closes and assets are liquidated, the stakes and the litigation around conversion tend to be higher.
What It Does to Your Credit
A bankruptcy filing hits your credit report hard regardless of which chapter you choose. Under the Fair Credit Reporting Act, a bankruptcy case can remain on your credit report for up to 10 years from the date the order for relief was entered.12Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports That ceiling applies to both Chapter 11 and Chapter 13 filings. In practice, the major credit bureaus voluntarily remove completed Chapter 13 cases after seven years, giving Chapter 13 filers a modest advantage in rebuilding credit sooner.
Timing between filings matters too. If you receive a Chapter 13 discharge and later need to file again, you must wait at least two years from filing date to filing date before you can receive another Chapter 13 discharge. If you received a Chapter 7 discharge, the waiting period before a Chapter 13 discharge is four years. Those gaps run from petition date to petition date, not from the date discharge was actually granted.