A Chapter 11 Bankruptcy usually involves an attempt to stay in business while a Bankruptcy court supervises the "reorganization" of a company’s debt obligations. Chapter 11 Bankruptcy is available to any business, whether it was organized as a corporation or a sole proprietorship. Chapter 11 Bankruptcy is also available to individuals, although it is most commonly used by corporate entities. In most instances the debtor remains in control of its business operations as a "debtor in possession", and is subject to the oversight and jurisdiction of a Bankruptcy court. The Bankruptcy court can grant a company complete or partial relief from their debts and it contracts in order to give the company a fresh start. If a business's debts exceed their assets following a Chapter 11 Bankruptcy then the company's owners will lose all of their rights and interests in the company and the company's creditors will be given ownership of the newly reorganized company.

Chapter 11 Bankruptcy, as opposed Chapter 7 Bankruptcy, can allow a company’s employees to keep their jobs. With a Chapter 11 Bankruptcy, a business is maintained rather than being dismantled, and the business's creditors end up with more money than they would if the business had filed for a Chapter 7 liquidation. Since Chapter 11 is a reorganization, debtors may have the Bankruptcy discharged within a few months or up to several years, depending on the size and complexity of the Bankruptcy.

Debtors in Chapter 11 bankruptcies have the exclusive right to propose a reorganization plan for a period of time. After a certain amount of time has elapsed, creditors may also propose a reorganization plan. Reorganization plans must satisfy a number of different criteria in order to be "confirmed" by the Bankruptcy court. Among other things, creditors must vote to approve the reorganization plan. If a reorganization plan cannot be confirmed, the Bankruptcy court can either convert the case to a liquidation, under Chapter 7 Bankruptcy, or if it is in the best interests of the creditors and the estate, the case may be dismissed and returned to the status quo before the Bankruptcy proceeding. If a case is dismissed, then creditors will look to other methods to satisfy their claims.

At S.J. Packman & Associates, before we make any recommendations, our attorneys, certified debt specialists, and paralegals, are trained to ask the right questions to find out about your specific situation. Based on your current income and your financial hardship, we will determine which course of action will work best for you. We do not only offer one path, as there is no one process that can solve everyone’s needs. We will take our time with you and help evaluate what your best course of action should be. Call now and one of our advisors will be there to get you started on your path to financial freedom. There is no obligation to enroll, so don’t delay.