Chapter 11 concerns the regulations for allowing the debtor to enter into an agreement with their creditors to allow a business to continue to function. The full regulations can be found on the website of the United States Courts.
Chapter 11 is virtually always on for CORPORATIONS and is a "reorganization" rather than a liquidation. Chapter 7 dissolves the corporation. C-7 can happen, and frequently is, shortly after C-11 (actually converting the C-11), especially if no viable reorganization plan can be found.
chapter 7
The difference between Chapter 7 bankruptcy and Chapter 11 bankruptcy is what happens to a party during the process. Parties undergoing chapter 7 bankruptcy must sell of their assets in an attempt to pay off dept. Chapter 11 allows for one to attempt to maintain their assets. During chapter 11 bankruptcy the party must negotiate with creditors to stay afloat.
Chapter 7, total liquidation
The most popular that I know if Chapter 11 which is rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets. Chapter 12 is rehabilitation for family farmers and fishermen and Chapter 13 is rehabilitation with a payment plan for individuals with a regular source of income. Chapter 7 is basic liquidation for individuals and businesses; Chapter 9 is municipal bankruptcy; Chapter 15 is ancillary and other international cases.
To somewhat oversimplify: Chapter 11 is "reorganization" for Corporations or a business, & Chapter 13 is a very similar thing for people. Debts and life are paid off/down and things re-organized. Chapter 7 is flat-out, busted-broke bankruptcy - out of business, not a penny left.
The main types of bankruptcy available for businesses are Chapter 7, Chapter 11, and Chapter 13. Chapter 7 involves liquidating assets to pay off debts, Chapter 11 allows for reorganization and continued operation, and Chapter 13 is typically used for small businesses to restructure debts.
Chapter 7
Your financial needs really determine which type you should file, if at all Chapter 7 is a liquidation bankruptcy and chapter 13 is a type of debt reorganization bankruptcy which essentially places you on a budget until you can pay back parts of your re-negotiated obligations. You should speak with an attorney about which option is best for your situation, keeping in mind that some debts are not dischargeable under either chapter 7 or chapter 13 bankruptcy.
Chapter 7 is a liquidation bankruptcy, you are giving up your assets. If you want to keep your home and car you would need to file a Chapter 11 Bankruptcy.
Because no plan of reorganization....agreeable to creditors and the court, where the company can continue in operations and successfuly operate was considered possible...its only choice being to dissolve.
No on all sides. First C-7 IS a liquidation, C-11 is a reorganization. Recently it has become popular to file under C-11 and actually dissolve, like a C-7. It has some operational and functional advantages...and it used to be if you operated in C-11 for a while, trying to get the most for creditors even though you knew the end result would be dissolution, at some point you would convert to a C-7. Now that costly and time consuming step is frequently avoided. It is still fair to say that most C-11 are actual reorganizations, with some continuation of the business enterprise.