- Chapter 11 is used by businesses to restructure their finances.
- The debtor is given time to protect itself from it’s creditors
- During this time it is required to formulate a plan to restructure its operations.
- The debtor may choose to close store locations, renegotiate contracts with suppliers, unions etc.
- Finally, it will try to get the creditors to agree to receive a discounted settlement of their claim.
- The process can be quite time-consuming and sometimes quite costly.
Typically this is for corporations who want to restructure their debt. It also can involve individuals who do not qualify for Chapter 13 because they exceed the debt limits.