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Benefits of a Chapter 11 Bankruptcy

Bankruptcy
Benefits of a Chapter 11

A Chapter 11 bankruptcy is sometimes called a “business bankruptcy” even though it can also be a good choice for an individual. A Chapter 11 allows a business or debtor to continue their normal operations while they come up with a “plan for reorganization.” In some circumstances they can create a plan for liquidation as well. It is essential to discuss the particulars of the case with a bankruptcy attorney in NJ to determine if it is beneficial for a particular situation. Just like the other types of bankruptcy codes the debtor in a Chapter 11 bankruptcy is trying to get his debts discharged but very few of those who file for this type of bankruptcy come through it with the business and ownership still intact. In the vast majority of cases the Chapter 11 works to form a new entity even though it will usually have the same name as the old company which went bankrupt. The newly formed business typically has new management along with a new structure of ownership. But there remain some very distinct benefits to filing this particular type of bankruptcy.