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LegalCornerTM - Business Bankruptcy - Chapter 7 or 11 F.A.Q.'s

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Q.What is a Chapter 11 Bankruptcy?

A.A Chapter 11 Bankruptcy is often referred to as a reorganization proceeding. It generally involves corporate debtors, but it is also available to individuals who have been engaged in a commercial enterprise and desire to stay in business, restructure existing debts, and attempt to reorganize and retain assets under court supervision. In other words, a Chapter 11 Bankruptcy provides a business debtor a limited amount of time to restructure its finances so that it may continue to operate in a normal fashion under a court approved "Plan". Creditors of a business filing a Chapter 11 Bankruptcy will vote on the Plan and the Plan must be approved by the court. A business may also choose to liquidate under this type of bankruptcy.

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