Which chapter of bankruptcy focuses on reorganization?

The chapter of bankruptcy that focuses on reorganization is Chapter 11. This form of bankruptcy is designed for businesses and individuals who seek to restructure their debts while continuing to operate. In Chapter 11, the debtor proposes a reorganization plan to keep the business alive and pay creditors over time. The plan must be approved by the creditors and the bankruptcy court, allowing the debtor to emerge from bankruptcy with a manageable level of debt.

Chapter 13 also involves a reorganization process but is specifically tailored for individuals with a regular income who want to pay off their debts in a more manageable way over a 3- to 5-year period. While it does involve some restructuring of debt, Chapter 13 is often aimed at consumers rather than businesses.

Chapter 7, on the other hand, involves liquidation of assets to pay off debts rather than restructuring. It is typically used by individuals or firms who do not have the means to repay their debts and seek to discharge most of their financial obligations.

Chapter 12 is specialized for family farmers and family fishermen, allowing them to propose a repayment plan similar to Chapter 13, but it focuses on the unique circumstances and income variations in the agricultural sector.

Thus, Chapter 11 is the correct choice for focusing specifically