Another important chapter in filing for small business bankruptcy in the United States is the Chapter 11. A Chapter 11 Bankruptcy case is generally considered to be very complex, and is typically used to reorganize the financial affairs and debts of a corporation or other business entity.
Very often, the Chapter 11 cases are used to reorganize business debts through a combination of asset liquidations, the slowdown of mortgages and other secured loans, and the creation of a plan to a pay a small portion of unsecured debt and trade obligations occurred during the operations of the business. During this reorganization considering the Chapter 11, debtor is consummate by obtaining court confirmation of a Chapter 11 Plan setting for the amount, manner, and timing of payment to various categories of creditors.
Although generally reserved for business entities, in appropriate circumstances a Chapter 11 bankruptcy may be the best course of action for certain individual debtors. In some cases, the amount of debt owed by an individual makes that person ineligible for Chapter 13, but a good candidate to file under Chapter 11. In other cases, the greater flexibility of Chapter 11 makes it a better type of bankruptcy case for certain individuals having unusually complex financial problems.