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 Minnesota, as in other states, Chapter 11 of the Bankruptcy Code allows for the reorganization of a debtor's business affairs, debts, and assets. It is typically utilized by corporations and partnerships, but it is also available to individuals and sole proprietors who meet certain criteria. Under Chapter 11, a debtor usually proposes a plan of reorganization with the goal of restructuring debts and continuing operations while repaying creditors over a period of time. The process involves negotiation with creditors and approval by the bankruptcy court. Chapter 11 provides the debtor with a fresh start, subject to the debtor's fulfillment of its obligations under its reorganization plan. The specifics of the process are governed by federal bankruptcy laws, and cases are handled in the federal bankruptcy courts within Minnesota. An attorney specializing in bankruptcy law can provide guidance on the intricacies of filing for Chapter 11 in Minnesota.