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 South Carolina, 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 individual entrepreneurs and business owners. Under Chapter 11, a debtor usually proposes a plan of reorganization with the goal of restructuring debts and continuing operations while repaying creditors over an extended period. The process involves negotiation with creditors and confirmation by the bankruptcy court. While federal law governs the proceedings of a Chapter 11 bankruptcy, local rules and procedures can vary, and South Carolina bankruptcy courts may have specific guidelines and forms that need to be followed. Debtors considering Chapter 11 should consult with an attorney experienced in bankruptcy law to navigate the complex process and ensure compliance with both federal statutes and local court rules.