Chapter 11 bankruptcy is the most common form for businesses. While some individuals can use Chapter 11, most individual debtors do not meet the eligibility requirements.
Chapter 11 provides the opportunity for companies to reorganize their debts, usually in an effort to keep the company in operation.
This is one of the most complex forms of bankruptcy, and the company must propose a reorganization plan and negotiate the plan with its creditors.
Filing for Chapter 11 bankruptcy offers businesses a fresh start, but it can also result, at least partially, in relinquishing ownership of assets to creditors. Therefore, the costs and benefits must be calculated when considering whether or not to declare bankruptcy.