Of the three primary forms of bankruptcy in the U.S., Chapter 11 bankruptcy might be the least common — in 2013, 8,890 Chapter 11 bankruptcies were filed out of the total 1,071,932 bankruptcies filed.
That doesn’t mean that Chapter 11 bankruptcies aren’t helpful — they are just more specific and help a certain type of filer in particular.
Do you know as much as you ought to about the Chapter 11 bankruptcy timeline? To understand if this is the right type of bankruptcy help for you, here are the three most essential facts about Chapter 11 bankruptcy explained:
Chapter 11 bankruptcy helps companies and businesses
Most Chapter 11 bankruptcies are filed by companies, corporations and other organizations — entities that consist of more than one person. For these cases, businesses will sometimes sell off some or all of their assets to fulfill the terms of the bankruptcy. However, if the business’ assets are insufficient, it may be forced to close its doors. Some organizations are not permitted to file Chapter 11 bankruptcy, however — insurance companies and utilities providers being two examples.
Occasionally, individuals can use the Chapter 11 bankruptcy timeline
In rare instances, individuals who own businesses in a sole proprietorship may file this form of bankruptcy. This bankruptcy would involve both the business and personal assets of the filer. The vast majority of individual bankruptcies filed are Chapter 7 and Chapter 13, however — these are geared toward consumers who don’t own their own business ventures.
Chapter 11 bankruptcies reorganize your debt
Unlike a Chapter 7 bankruptcy, which discharges all applicable debts, a Chapter 11 bankruptcy involves the creation of a debt reorganization and restructuring that allows the filer or filers to repay these debts over a determined time period.
Want to know even more about the Chapter 11 bankruptcy timeline or how to file bankruptcy? Ask us any questions you may have by leaving a comment below. Helpful info also found here.
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