Home » Finance

What Chapter 11 Bankruptcy Is All About

Jun 17, 2008
Corporations who get into deep financial trouble can file Chapter 11 bankruptcy. Herein the courts will order the company's creditors to stop pursuing monies that have been extended to the business in the form of credit.

Reasons For Filing Chapter 11 Bankruptcy

The most common reason for a company to file Chapter 11 bankruptcy is because the company's finances get mismanaged and thus the debt piles up until it becomes too overwhelming to repay. When this happens the court will appoint a trustee to oversee the company's debts and assets. The trustee will then help the company repay its creditors in a timely and efficient manner.

The Process Of Filing Chapter 11 Bankruptcy

Corporations who file Chapter 11 bankruptcy have to go through much of the same thing that individuals do. However, the main difference is that creditors can force a business to go into Chapter 11 bankruptcy so that the court will take control of their finances. Whenever this takes place the creditors have a better chance of being repaid. At the same time the company can still continue generating revenue while getting its finances and assets in order.

What Happens During A Chapter 11 Bankruptcy?

Whenever a business files for Chapter 11 bankruptcy the stockholders receive nothing once the bankruptcy is completed. As such, they lose all of their rights to the company and its assets because the creditors take control of the company to help it retrieve the monetary losses that they have incurred, to help save people's jobs and to help retain the business' profit-making capabilities.

While Chapter 11 bankruptcy is a good idea for a failing business, there are many critics who feel it hurts those who are involved with the company. They also say that it is unfair for a company to continue to operate once it has filed for bankruptcy because it will not have to pay its debts and can retain the money to improve upon itself. This puts the company at an advantage over its competitors since it has more money to put into acquiring more customers and planning better products.

However, other people say that filing for Chapter 11 bankruptcy only perpetuates the problem of bad financial management in the upper tiers of a corporation. These people also say that filing for bankruptcy protection will only add to this problem of mismanaging money and hence also the practice of bad financial management.
About the Author
You can find many more Bankruptcy related articles at Bankruptcy Marketing

For all your Bankruptcy needs, please visit http://www.need-bankruptcy-info.com
Rating:
Please Rate:
(Average: Not rated)
Views: 135
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources