Chapter 11 of the Bankruptcy Code generally provides for reorganization—usually of a corporation or partnership. A chapter 11 debtor (bankrupt entity) usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in a chapter 11 bankruptcy filing.

In Alabama, as in all states, Chapter 11 of the Federal Bankruptcy Code allows for the reorganization of a debtor's business affairs, debts, and assets. This provision is typically used by corporations and partnerships, but it is also available to individuals who have substantial debts and assets that exceed the limits for Chapter 13 bankruptcy. Under Chapter 11, a debtor usually proposes a plan of reorganization to maintain business operations and pay creditors over a period of time. The plan must be approved by the creditors and the bankruptcy court. If the debtor can't propose a plan that is accepted by creditors and confirmed by the court, the creditors may propose a plan instead. Chapter 11 cases in Alabama are filed in the United States Bankruptcy Court for the Northern, Middle, or Southern District of Alabama, depending on the location of the debtor. The process is governed by federal law, and while state law can influence certain aspects of the bankruptcy (such as exemptions and the treatment of specific types of debts), the overarching procedures and eligibility are consistent across the United States due to the federal nature of bankruptcy law.