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Chapter 11 refers to a section of the U.S. Bankruptcy Code that allows businesses and individuals to reorganize their debts and attempt to return to profitability while remaining under the protection of the bankruptcy court.
Any business entity or individual that finds themselves in financial distress and seeks to restructure their debts can file for Chapter 11 bankruptcy, provided they meet the eligibility requirements set forth by the bankruptcy code.
Filing for Chapter 11 involves completing various forms that detail your financial situation, including schedules of assets and liabilities, a statement of financial affairs, and a proposed plan for reorganization. These forms must be submitted to the bankruptcy court.
The purpose of Chapter 11 is to provide a legal framework for businesses and individuals to reorganize their debts efficiently while protecting them from creditors during the restructuring process.
Debtors must report information including their income, expenses, assets, liabilities, and a detailed plan for reorganization. This includes identifying all creditors and the amount owed to them.
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