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What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is primarily for businesses rather than for individuals (for individual bankruptcies, see “What is Chapter 7 Bankruptcy?” and “What is Chapter 13 Bankruptcy?”). Most Chapter 11 petitioners are corporations or partnerships; however, self-employed individuals may also file for Chapter 11 bankruptcy. Chapter 11 bankruptcy allows a business to continue operating while paying off its debts. In this way, it is the business equivalent of Chapter 13 bankruptcy. Even considering the above, Chapter 11 bankruptcies are rare for small businesses.