Chapter 11 Bankruptcy
A form of bankruptcy that allows a business to reorganize its debts and continue operating under a court-approved repayment plan, rather than liquidating.
Unlike Chapter 7, Chapter 11 is designed to let a business keep operating while restructuring its debts, typically negotiating new terms with creditors under court supervision rather than shutting down entirely.
Because it allows continued operation, a completed Chapter 11 reorganization may be viewed somewhat differently by lenders than a full liquidation, though it still generally represents a significant factor in future underwriting decisions.
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