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Chapter 11 - Business Bankruptcy

Chapter 11 is a chapter of the United States Bankruptcy Code that protects any form of business that is unable to service its debt or pay its creditors through a process of reorganization under the bankruptcy laws. Although an individual may file under Chapter 11, it is generally used to reorganize a business.

Chapter 11 allows the debtor in possession several mechanisms to restructure its business. The debtor may acquire financing and loans by giving new lenders first priority on the business' earnings. The bankruptcy court may also permit the debtor to reject and cancel contracts. Chapter 11 debtors are also protected from litigation against the business through the use of an automatic stay. While the automatic stay is in place, most litigation against the debtor is stayed, or put on hold, until it can be resolved in bankruptcy court, or resumed in its original venue.

Generally speaking, it is more advantageous to reorganize than to liquidate. Reorganization often times preserves jobs and assets. An example of this on a macro scale would be General Motors. By extending and reducing their debts, and by dramatically reducing its operating costs, it has returned to viable state. Granted, the Federal Government had a hand in ensuring the success of this turn-around, but be assured, for many companies, it can be done without such assistance.

Frequently Asked Questions

  • What is a "Debtor in procession"?
  • Is Chapter 11 only for corporations?
  • What is a a "Small Business Debtor"?
  • What is a "Single Asset Real Estate Debtor"?
  • What is The "Automatic Stay"?
  • Who is on the "Creditors' Committees"?
  • What are the "Day-One Requirements"?
  • What is the "7-Day Package"?
 







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    Laguna Hills Bankruptcy
    25401 Cabot Rd.
    Suite 113
    Laguna Hills, CA 92653
    Call 888-362-6529

    Santa Ana Bankruptcy
    930 West Seventeenth St.
    Suite C
    Santa Ana, CA 92706
    Call 714-795-3536

    Corona Bankruptcy
    1411 Rimpau Ave.
    Suite 108
    Corona, CA 92879
    Call 909-708-4597

    Moreno Valley Bankruptcy
    24490 Sunnymead Blvd.
    Suite 101
    Moreno Valley, CA 92553
    Call 951-579-4756

    Watsonville Bankruptcy
    444 Airport Blvd.
    Suite 109
    Watsonville, CA 95075
    Call 888-362-6529

    Oceanside Bankruptcy
    1930 S Coast Hwy
    Suite 206
    Oceanside, CA 92054
    Call 760-450-3333

    Chula Vista Bankruptcy
    333 H Street
    Suite 5000
    Chula Vista, CA 91910
    Call 619-500-6535

    Escondido Bankruptcy
    320 East 2nd Ave.
    Suite 108
    Escondido, CA 92025
    Call 760-746-4476

    La Mesa Bankruptcy
    4817 Palm Ave.
    Suite I
    La Mesa, CA 91942
    Call 619-462-362

    San Diego Bankruptcy
    185 West F St
    Suite 100
    San Diego, CA 92101
    Call 619-234-3626