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 Kansas, as in all states, Chapter 11 of the Bankruptcy Code allows for the reorganization of a debtor's business affairs, debts, and assets. It is most commonly utilized by corporations and partnerships, but it is also available to individuals and sole proprietors who meet certain criteria. Under Chapter 11, a debtor typically proposes a plan of reorganization to maintain business operations and pay creditors over an extended period. The plan must be approved by the creditors and the bankruptcy court. If the debtor can't propose a plan acceptable to the creditors, the creditors may propose a plan instead. Chapter 11 provides the debtor with a fresh start, subject to the debtor's fulfillment of its obligations under its plan of reorganization. The process is complex and often requires the guidance of an attorney with experience in bankruptcy law.