Chapter 11 Bankruptcy
Chapter 11 permits any person or business eligible for relief under Chapter 7 to be eligible for relief under Chapter 11. Thus, individuals who cannot qualify for Chapter 7 and Chapter 13 due to the Code’s debt or income limitations can file under Chapter 11 to reorganize their debt in 3 to 5 years. Chapter 11 bankruptcy is intended primarily for the reorganization of businesses with heavy debt burdens, most often associated with corporations but available to small businesses as well. Chapter 11 allows the debtor to propose a plan for profitability post-bankruptcy, which may include cutting costs and seeking new sources of revenue or income while keeping creditors from harming you.
Even though a debtor may sell assets, the primary goal of Chapter 11 is to reorganize the debtor’s debt through a reduction in debt and payment plan while allowing the debtor to continue in its pre-bankruptcy financial and business activities. The debtor continues to operate the business or occupation.
Differences between Chapter 11 and Chapter 11 under the Small Business Reorganization Act
Chapter 11 Bankruptcy starts at $2500.
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