Chapter 11 of the bankruptcy code, generally speaking, is the section of the code used for the reorganization of businesses. This chapter may be used for either companies or individuals who are in business. We usually hear about it when it involves very wealthy individuals, airlines, oil companies or other large businesses.

 

However, it is also commonly used by medium-sized and small businesses. Chapter 11 allows a business or business person to reorganize its debts. Most publicly held companies will file under Chapter 11 rather than Chapter 7 because they can continue doing business in times of cash flow shortages and still run their business and control the bankruptcy process.