If you are concerned about having to file bankruptcy in the near future, you probably want to know what options are available to you, and which one is best for you. While bankruptcy is always an unpleasant experience, having the right knowledge can relieve some of the stress and worry associated with this process.
Chapter 11: Basic Facts
Chapter 11 bankruptcy is a type of bankruptcy that permits reorganization. It is available to individuals, sole proprietorships, and corporations. However, Chapter 11 is primarily used by corporations. Most individuals tend to opt for Chapter 13 bankruptcy when forced to make the tough decision.
If you or your business can no longer pay creditors the money you owe, Chapter 11 could be your best route out of your current situation. Chapter 11 can be a good option to consider if you want to remain in control of your business. While Chapter 7 and similar forms of bankruptcy result in liquidation, Chapter 11 is appealing because it allows the business or individual to restructure. However, keep in mind, your ability to act after filing Chapter 11 is largely governed by the court system.
If you are an individual or small business, Chapter 11 bankruptcy is probably not for you. Because of the expensive fees associated with Chapter 11 and the difficulty of the process, most individuals and small business will benefit from filing Chapter 7 or Chapter 13 bankruptcy.