Simple English definitions for legal terms
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Chapter 11 is a part of the law in the United States that helps businesses that are in trouble. It allows them to change the way they owe money to people they owe money to, with the help of a court. This helps the business keep going while they make changes to get better. Most of the time, it is used by businesses, but sometimes people can use it too.
Chapter 11 is a section of the United States Bankruptcy Code that allows a business that is insolvent or at risk of insolvency to restructure its finances under court supervision while continuing its normal operations. This process is subject to creditor approval.
Although individuals can also use Chapter 11, it is mostly used by businesses. The goal of Chapter 11 is to help businesses get back on their feet financially and avoid liquidation.
These examples illustrate how Chapter 11 can help businesses reorganize their finances and operations to become financially stable again. By using Chapter 11, businesses can avoid liquidation and continue to operate, which can benefit both the business and its creditors.