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 Missouri, 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 typically utilized by corporations and partnerships, but it is also available to individuals who have substantial debts and assets that exceed the limits of other bankruptcy chapters such as Chapter 13. Under Chapter 11, a debtor usually proposes a plan of reorganization to maintain its business operations while paying creditors over a period of time. The process involves negotiation with creditors to alter the terms of debts, which may include reducing the debt amount, extending repayment times, or changing interest rates. The goal is to restructure the business in a way that it can return to profitability and solvency while providing a way for creditors to be paid. The U.S. Bankruptcy Court for the Eastern and Western Districts of Missouri oversees Chapter 11 cases filed in the state. Debtors considering Chapter 11 should consult with an attorney to navigate the complex process and legal requirements involved.