Chapter 11 Defined
Chapter 11 allows a corporation to attempt to restructure its business by selling some of its assets and possibly even having the court excuse some of the debts they cannot pay. Most businesses who file Chapter 11 bankruptcy are doing so to try to save their company from closing.
Chapter 13 Defined
Chapter 13 is a court-supervised debt repayment plan designed for individuals, and does not cover businesses or their debts. It typically forgives some consumer debt and allows the person filing to keep assets such as a house while in debt repayment.
If creditors do not approve of a repayment plan in either Chapter 11 or Chapter 13, a judge can order a method of debt repayment. This could be an advantage to those who are in business or have personal contracts they cannot keep.
In both Chapter 11 and Chapter 13, a bankruptcy trustee of the federal court becomes deeply involved in either the person's or corporation's financial affairs. Filers are subject to budget requirements and review of their expenses and assets.
Any bankruptcy proceeding automatically stops a creditor's efforts to collect debts, which can provide some time and relief from the situation for the filer. Creditors cannot sue, contact the debtor or seize assets while the court is handling a Chapter 11 or Chapter 13 case.