Individuals who are contemplating filing for bankruptcy to get out of debt may wonder whether they should avail themselves of the financial relief provided under Chapter 11 or Chapter 13. In most instances of consumer bankruptcy, Chapter 13 will be the more appropriate choice -- but not always.
If a filer has too much debt or an irregular source of income, for instance, they may decide to file for bankruptcy under Chapter 11. Other possible reasons for this type of filing over Chapter 13 is that they want to remain debtors-in-possession (DIP) of the assets or need additional time to repay their debts than the five-year repayment plan required in Chapter 13.