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 New Hampshire, 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 to maintain business operations while paying creditors over a period of time. The process involves negotiation with creditors to alter the terms of debts, such as interest rates and balances. The goal is to restructure the business's finances so it can return to profitability and continue operations. The debtor remains in control of the business as a 'debtor in possession,' but the bankruptcy court must approve major business decisions. This type of bankruptcy can be complex, and debtors often work with attorneys to navigate the process and ensure compliance with both federal bankruptcy laws and any relevant New Hampshire state statutes that may apply.