Chapter 11 bankruptcy is available to individuals and businesses, but it is the most expensive and time-consuming bankruptcy option, so it is primarily utilized by businesses who are interested in continuing to operate while they restructure their finances in an effort to return to profitability. Thousands of businesses, including well-known corporations such as Revlon and JCPenney, have filed for Chapter 11 bankruptcy over the years.
Key Points:
- Business owners can generally continue to manage day-to-day operations throughout the bankruptcy process.
- The business has the first opportunity to present a repayment plan, which creditors must vote to accept.
- There is no time limit on a Chapter 11 repayment plan, but most repayment plans last between six months and two years.