Chapter 11 bankruptcy allows debtors to reorganize their debts. Companies and individuals are eligible to file for bankruptcy. For example, individuals with large debts that exceed the limitations of Chapter 13 may file for Chapter 11 bankruptcy. For a business facing financial difficulties, Chapter 11 bankruptcy is the only type of bankruptcy allowing the business to restructure its debts and continue its operations. Numerous major corporations filed Chapter 11 bankruptcy (K-Mart, United Airlines, General Motors, etc.), but smaller companies are filing Chapter 11 bankruptcies every day.
Chapter 11 bankruptcy is more expensive, time-consuming, and complex than other types of bankruptcy, but provides more tools and more flexibility. Chapter 11 debtor (or creditor) proposes a Chapter 11 plan in which the debtor (or creditor) proposes to restructure its debts, reduce certain debts, modify payment terms, reject certain contracts, sell certain assets, etc. If the bankruptcy court determines that the proposed plan complies with the provisions of the Bankruptcy Code and confirms the Chapter 11 plan, the new restructured debts became restructured debtor’s new liability. A Chapter 11 plan can help a debtor regain profitability, continue operations, and save jobs.
For more information about Chapter 11 and to schedule a CONSULTATION with Chapter 11 Bankruptcy Attorney in Phoenix to help you determine if Chapter 11 bankruptcy is your best option, contact us via email or call us at 480-425-2009.