What is Chapter 11 bankruptcy and will I qualify?

What’s interesting about Chapter 11 bankruptcies is that both individuals and companies can both file a Chapter 11. For individuals a Chapter 11 bankruptcy is a good option if a person has substantial assets that are essentially too high for what the bankruptcy code allows.

More commonly, however, the Chapter 11 bankruptcies are filed by corporations. The automobile industry bankruptcies that you’ve heard about recently, all of the airline bankruptcies, those were all Chapter 11 bankruptcies.

What a Chapter 11 is, is an orderly reorganization for that company. It allows them to enter into agreements with their creditors and to make adjustments to their obligations to allow that company to continue to move forward and to restructure that debt in a manner that allows them to then start to grow again and get back to the business that they’re in business for.