Chapter – 11 US Bankruptcy

A business in the US when is unable to pay off it’s debts to it’s creditors due to a restriction on the income source, it can file a case or petition for bankruptcy under the chapter – 13 of the US bankruptcy code.

US Bankruptcy law chapter – 11 is a chapter of the US bankruptcy code, which provides an oppurtunity to the petitioner to reorganize his debt, under the guidance of the US bankruptcy court.

A case under this law can be filed by any business, which is organized as a corporation, run by a trust / board of directors, under the leadership of a chairman, or under the sole proprietorship of a sole individual, or to a single individual. Cases under chapter – 11 of the US bankruptcy code is filed prominently by corporate sized businesses.

Chapter – 11 is a little different from the chapter – 7 of the US bankruptcy code which oversees the process of liquidation. It is similar to the chapter – 13 of the US bankruptcy law in terms of reorganization process. The sole point of difference being that chapter – 13 is particularly suitable for private individuals while this particular chapter of the US bankruptcy code is suitable for businesses as well.

Chapter – 11 US bankruptcy code retains many of the standard features of the other chapters that are meant for dealing with bankruptcy cases. It has some additional features that are discussed in detail.

A US bankruptcy law, chapter – 11 case, provides option to the trustees to run the debtor’s business. Unless a trustee has been appointed by the business house that has filed the case, the debtor, can act as debtor in posession and hence can act as a trustee of the business.