Chapter 11 is known as the reorganization chapter of the bankruptcy code because it permits a debtor to reorganize financial obligations while retaining assets, which may be accomplished through the sale of certain assets to pay down debt and refinance existing debts.
Both individuals and businesses can file a Chapter 11 bankruptcy. But, individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
In addition, no individual may be a debtor under chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.
There are situations where the bankruptcy administrator determines that there are insufficient approved agencies to provide the required credit counseling debt management plan is developed during required counseling, it must be filed with the court.