bankruptcy chapter 11

Select an Experienced Chapter 11 Bankruptcy Attorney - Lawyer

A federal system of statutes and courts which permits persons and businesses which are insolvent (debtors) or (in some cases) face potential insolvency, to place his/her/its financial affairs under the control of the bankruptcy court. The procedure is that when the debtor's debts exceed his/her/its assets or ability to pay, the debtor can file a petition with the bankruptcy court for voluntary bankruptcy or the debtor's unpaid creditors can file an "involuntary" petition to force the debtor into bankruptcy, although voluntary bankruptcy is far more common.

Chapter 11 bankruptcy allows a business to reorganize and refinance to be able to prevent final insolvency. Often there is no trustee, but a "debtor in possession," and considerable time to present a plan of reorganization. Sometimes this works, but often it is just a bottomless pit of more debt and delay. The final plan often requires creditors to take only a small percentage of the debts due (what is owed them) or to take payment over a long period of time.

Legal Deiscription Provided by Law.com Dictionary