What Is Chapter 11 Bankruptcy?

Chapter 11 is the "reorganization" chapter of the U.S. Bankruptcy Code. It lets a business or individual restructure debt and keep operating while a court-approved repayment plan is worked out, instead of shutting down and liquidating everything.

What Is Chapter 11 Bankruptcy?

Chapter 11 is best known as the path large companies take to reorganize rather than close. The debtor stays in business, the automatic stay halts most collection while the case proceeds, and creditors are eventually repaid under a plan that the court confirms. There are no debt limits in Chapter 11, which is part of why it handles the biggest and most complicated cases. It is far less common than consumer bankruptcy: 10,370 Chapter 11 cases were filed nationwide in 2025, against 374,294 Chapter 7 cases and 235,923 Chapter 13 cases. For a broader look at what bankruptcy is across every chapter, start with our FAQ hub.

How Chapter 11 Reorganization Works

The defining feature of Chapter 11 is that the filer usually becomes a debtor in possession — it keeps control of its assets and continues operating under court supervision instead of surrendering everything to a trustee. From there, the debtor proposes a plan of reorganization that spells out how creditors will be paid, which contracts continue, and how the business will run going forward. Creditors vote, and the court decides whether to confirm it.

This is not a fast process. Getting a plan confirmed typically takes about one to three years, and larger cases with many creditors can run longer. The tradeoff for that time and expense is survival: a company that would otherwise be liquidated can shed unsustainable debt and stay open. Our full guide covers how to file for Chapter 11 bankruptcy in more detail.

Who Files Chapter 11

Chapter 11 is built for businesses (corporations, partnerships, and sole proprietors) that want to reorganize rather than close. But it is not limited to companies. Because it has no debt limits, Chapter 11 is also available to individuals whose debts are too large for Chapter 13.

Chapter 13 caps eligibility at secured debts under $1,580,125 and unsecured debts under $526,700 (limits effective April 1, 2025, adjusted every three years). An individual who exceeds either ceiling cannot use Chapter 13, and Chapter 11 becomes the reorganization option. That is a real but narrow group, which is why individual Chapter 11 filings are rare compared with Chapter 7 and Chapter 13.

Chapter 11 vs Chapter 7 and 13

The three chapters solve different problems. Chapter 7 liquidates: it wipes out eligible debt in a few months, and a business that files it usually stops operating. Chapter 13 reorganizes the debts of an individual with regular income over a three-to-five-year plan. Chapter 11 reorganizes without the Chapter 13 debt caps and lets a business keep running while it does.

The filing fee gap tells part of the story. Chapter 11 costs $1,738 to file, several times the $338 Chapter 7 or $313 Chapter 13 fees, and the professional and administrative costs on top of that are substantial. For most individuals, Chapter 7 or Chapter 13 is the right tool. Chapter 11 earns its cost when a business needs to stay open or when a filer's debts are simply too large for any other chapter. You can see how the numbers break down nationally on our bankruptcy statistics page.