Chapter 11 Bankruptcy
Under Chapter 11 bankruptcy, businesses can restructure debt payments and keep assets. This is unlike Chapter 7 bankruptcy that governs the process of a liquidation bankruptcy of businesses or individuals. It can be very expensive and is not for everyone.
The following businesses may file a Chapter 11 bankruptcy:
Under Chapter 11 bankruptcy, the debtor/business/individual keeps possession of the bankruptcy assets while going through the process of reorganization. During a Chapter 11 bankruptcy proceeding, the owner of the business remains in possession until one of the following happens:
A major benefit of a Chapter 11 bankruptcy is that a debtor is allowed to keep all or a portion of its assets in Chapter 11. In contrast, under Chapter 7, a debtor can retain only a limited amount of exempt property. Under the U.S. Bankruptcy Code, businesses are not allowed to exempt property.