What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy is a form of bankruptcy protection available to individuals and businesses in California. It is a form of reorganization, meaning that the debtor has the opportunity to restructure their debt and create a plan to pay it back. This differs from other forms of bankruptcy, such as Chapter 7 liquidation, where the debtor’s assets are sold to pay off their creditors. Under Chapter 11 of the Bankruptcy Code, a debtor must file a petition with the court to start the process. This petition outlines the debtor’s financial situation and must include a plan for restructuring their debt. The debtor must then obtain approval from the court for their plan and must make regular payments to their creditors while the case is pending. Chapter 11 bankruptcy generally provides debtors with substantial protection from creditors and provides a degree of stability and control over their financial situation. During the restructuring process, debtors are able to maintain control over their assets and have the opportunity to propose a plan that works best for them. This form of bankruptcy can provide a way out of financial struggles, but it does require a significant amount of time and effort to complete.

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What is Chapter 11 bankruptcy?

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