Chapter 11 Bankruptcy for Small Businesses
Chapter 11 bankruptcy is a type of reorganization bankruptcy often used by large corporations and businesses. Because Chapter 11 can be expensive, time-consuming, and complex, small businesses often opt to use other forms of bankruptcy.
Chapter 11 is the only bankruptcy option, however, for a small business seeking to restructure and continue in operation if it is owned by a partnership, limited liability company, or corporation. (Chapter 13, the other reorganization bankruptcy, can only be filed by individuals.) In addition, because your debts must be under certain limits to file for Chapter 13, if you owe lots of money to creditors, Chapter 11 may be your only way to file for bankruptcy and stay in business.
Chapter 11 bankruptcy and Chapter 11, Subdivision V, let filers restructure debts, modify payment terms, and decrease balances and are primarily used by struggling businesses with the ability to remain operational.
Learn about the differences between Chapter 11 and Chapter 13 business bankruptcies.
Learn when Chapter 7 or Chapter 11 bankruptcy works best for businesses and how bankruptcy rules differ depending on whether an individual or small business files for Chapter 11 vs. Chapter 7 bankruptcy.
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