Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a reorganization of debt. Unlike Chapter 13, there is not a limit on the amount of debt which can be filed. For large businesses trying to restructure their debt, Chapter 11 is generally the choice of bankruptcy options. When a business files a Chapter 11, the debtor usually continues to remain in possession of their assets and their business operates under the supervision of the court, specifically for the benefit of the creditor. If the management of the debtor is less than honest or ineffective, a trustee may be appointed by the courts (Moran Law Group, 2007).

Chapter 11 bankruptcy laws indicate that an individual may not file bankruptcy under Chapter 11, or any other chapter for that matter, if they have had a previous bankruptcy dismissed within the preceding 180 days as the individuals intentional failure to appear before or comply with orders of the court, or if their dismissal was voluntarily occurred after creditors had sought relief to recover property. The United States bankruptcy laws also state that no individual can be a debtor under Chapter 11 (or any other bankruptcy code) unless they have received credit counseling from an approved credit counseling agency within 180 days prior to filing. When debt management plans are developed during required credit counseling, the plans must be filed with the court (US Courts, 2007).