When a company enters bankruptcy to reorganize and try to recover,it is known as which type of bankruptcy?
A) Chapter 7.
B) Chapter 11.
C) Chapter 13.
D) Chapter 21.
E) None of the above.

Question

Quizplus · Accepted Answer

Chapter 11 bankruptcy is the type of bankruptcy where a company enters to reorganize and try to recover. This allows the company to keep operating while coming up with a plan to pay off their debts and restructure their business. Chapter 7 bankruptcy involves liquidating a company's assets to pay off its debts, while Chapter 13 bankruptcy is typically used by individuals who want to reorganize their debts and pay them off over time. Chapter 21 is not a valid type of bankruptcy.

When a Company Enters Bankruptcy to Reorganize and Try to Recover,it