Defnition
Chapter 11 Bankruptcy is a legal process by which an individual, corporation, or partnership proposes to have their debts reorganized. This form of bankruptcy is commonly referred to as reorganization.
Analysis
Chapter 11 bankruptcy is most commonly filed by businesses, although individuals with very large debt loads may also file for this type of bankruptcy. Unlike chapter 13 bankruptcy, chapter 11 does not impose a maximum limit on the amount of debt the individual or organization can have to file. Chapter 11 bankruptcy is filed mostly by large corporate entities.
Like other forms of bankruptcy, filing for a chapter 11 bankruptcy is a matter of public record. Filing for chapter 11 bankruptcy also provides the debtor with an automatic stay.
While chapter 11 is available to individuals, most individuals who wish to file for bankruptcy file under chapter 7 (liqudation) or under chapter 13 if they wish to restructure their debt.
