Chapter 11 Bankruptcy is generally used by Businesses to reorganize their debts and continue operating. Corporations, LLC's , and partnerships, use Chapter 11 because they can't file Chapter 13 Bankruptcy and Chapter 7 does not permit them to continue operating. In Chapter 11, the debtor usually remains in possession of the assets and continues to operate any business, subject to the oversight of the court and the creditors committee. The debtor proposes a plan of reorganization, that upon acceptance by a majority of the creditors, is confirmed by the Bankruptcy Court and binds both the debtor and the creditors. To find out if Chapter 11 bankruptcy is the right move for you or your company, contact Buffalo NY bankruptcy Attorney Stephen Underwood.
Generally, individuals do not file for Chapter 11 Bankruptcy unless they have debts or assets that exceed certain limits set by the Bankruptcy Code in Chapter 13 cases. The limits change every three (3) years. Sometimes individuals file Chapter 11 because Chapter 13 requires individuals to pay off the debts in the plan within three (3) to five (5) years which is sometimes not possible.