There are a number of Bankruptcy laws under the United States and Chapter 11 is one of the Bankruptcy Code which governs the process. It is eligible for the business organization or partnership. If you own a business enterprise or partners which is unable to pay its own debts or the creditors then with the aid of bankruptcy court you can file for bankruptcy protection under Chapter 11. Under the chapter 11 the business owner can stay in the business and a bankruptcy court will supervise the reorganization of the company.
In here the court is able to grant complete relief from the debts or at time partial, based on the circumstances. This will enable you take a new start for your business and start with debt less financial stature. If the case is such where the debt of the company exceeds than its assets, then when the bankruptcy process is complete the owners of the company are left with nothing. This leads to cease of their rights and interests. This eventually leads to the creditor with the ownership of the company. And since the company has been reorganized, the creditors can wait for the success of the same and gain compensation from the losses.
With lot of complexity involved in the procedure, you need to hire an attorney for the legal services. Hence, cost for filing Chapter 11 Bankruptcy could be high too. However there are also probabilities of Affordable Chapter 11 legal services if and when possible.
There are certain norms for the Chapter 11 bankruptcy which needs to be considered. The debtors when file the Chapter 11 cases need to provide with a plan for reorganization. If the debtor is unable to pursue this plan then the proposal will need to be carried out by the creditors. If both the parties fail to do the same, the case will be dismissed and the initial position will be regained.
