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What is Chapter 11 bankruptcy?
Chapter 11 bankruptcy is most often used by large corporations to help reorganize debts so they can pay back their creditors when they are struggling financially. This type of bankruptcy was widely used by car manufacturers during the recession of 2008. Many manufacturers had financial troubles and would have gone out of business if they hadn’t filed for Chapter 11 bankruptcy.
With Chapter 11 bankruptcy, companies are able to continue operating while their finances are restructured so that they can afford to pay their bills. Just like with other forms of bankruptcy, once an automatic stay goes in place, debt collectors are required to stop making calls to collect on debts the business owes.
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