What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy is a type of bankruptcy filing that is available to businesses, corporations, sole proprietors, and individuals with high levels of debt. It is also called a “reorganization” because the goal is to allow the debtor to reorganize their finances and continue their business operations. In a Chapter 11 bankruptcy filing in Texas, the debtor will submit a petition to the court listing all of their debts and assets. This will allow the court to assess the debtor’s financial condition and determine what debts need to be paid back. Before any debts can be paid back, the court will typically require the debtor to create a plan of reorganization. This plan must include how the debtor plans to pay off their debts and other terms for reorganizing their finances. Once the debtor’s plan of reorganization is approved by the court, creditors can start to collect the payments. During the reorganization period, the debtor is typically allowed to maintain ownership of their property and continue to operate their business. This allows them to make necessary payments while reorganizing their financial situation. At the end of the reorganization period, the court will usually discharge any remaining debt that has not been repaid. This allows the debtor to start fresh financially and move on from their past financial troubles. Chapter 11 bankruptcy is a useful tool for debtors struggling with large amounts of debt.

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What is Chapter 11 bankruptcy?

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