What Is Chapter 11 Bankruptcy For Usually?

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Chapter 11 bankruptcy attorney’s cases usually make it to the news when their large, corporate clients fall into financial turmoil, and wind up needing bankruptcy help. Such companies that have had to employee a Chapter 11 bankruptcy attorney include K-Mart, Lehman Brothers, General Motors and United Airlines. However, not all Chapter 11 cases wind up on the news. In fact, in 2010 there were close to 14,000 cases that were filed in the United States!

Similar to a Chapter 7 or Chapter 13 bankruptcy, Chapter 11 is filed voluntarily. Although, it is possible for creditors to band together and file an involuntary Chapter 11 petition against a debtor. Most businesses, though, generally hire a Chapter 11 bankruptcy attorney to being the petitioning process in the city where there business is located, or “domiciled” in the case of corporations.

Although it’s more common for businesses to file this kind of bankruptcy, individuals can petition for Chapter 11 when they have too much debt or income to qualify under Chapter 7 or Chapter 13. When possible, most individual debtors will choose these other two, more popular types of bankruptcy, because they can avoid the risk, time and money that’s usually involved in Chapter 11. In fact, during the year 2010, nearly 1.6 million Americans filed bankruptcy under Chapter 7 and 13, which is more than 11 times the number of people who filed Chapter 11 in that year.

Bankruptcy law attorneys’ reports have indicated that Chapter 11’s reorganization works. Studies of Chapter 11 bankruptcy attorneys have indicated that about 10% to 15% of their cases result successfully. Most cases are eventually dismissed, usually by agreement of the parties, or they’re converted to Chapter 7 liquidations. These dismissals or conversions require court approval.

If your business is struggling, you may want to consider the help of a Chapter 11 bankruptcy attorney. Hopefully this article provided the right bankruptcy questions and answers to dismiss any bankruptcy myths you may have had about Chapter 11. If you have questions about what a Chapter 11 bankruptcy attorney can do for you, feel free to ask in the comments. Check out this website for more.

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