What is the Difference between Chapter 11 and other types of Bankruptcy?
• Chapter 11 (business reorganization) – is a type of reorganization bankruptcy, like Chapter 13. Chapter 11 is available to individuals, corporations, and partnerships. It has no limits on the amount of debt, again, like Chapter 13. Chapter 11 is the typical bankruptcy choice for large businesses seeking to restructure their debt and become profitable again. Chapter 11 is the most flexible of all the bankruptcy chapters, which makes it generally more expensive to the debtor. The rate of successful reorganizations is very low. • Chapter 7 – is the usual choice for individuals, however, a company can choose to file for Chapter 7 if it intends to stop all operations and go out of business. What Happens if a Business Files for Chapter 11 Bankruptcy? If a company declares bankruptcy under Chapter 11, it will attempt to reorganize. Under Chapter 11, a reorganization plan is affirmed by the votes of the creditors. Management may continue to run the business, but the bankruptcy court must app
• Chapter 11 (business reorganization) – is a type of reorganization bankruptcy, like Chapter 13. Chapter 11 is available to individuals, corporations, and partnerships. It has no limits on the amount of debt, again, like Chapter 13. Chapter 11 is the typical bankruptcy choice for large businesses seeking to restructure their debt and become profitable again. Chapter 11 is the most flexible of all the bankruptcy chapters, which makes it generally more expensive to the debtor. The rate of successful reorganizations is very low. • Chapter 7 – is the usual choice for individuals, however, a company can choose to file for Chapter 7 if it intends to stop all operations and go out of business.
