The legal filing that allows a firm in bankruptcy the opportunity to reorganize, and thus avoid having to liquidate its assets,is called a

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Chapter 11 bankruptcy allows a firm to reorganize its operations and finances, which may include negotiating with creditors, selling off assets, and restructuring its business model to become profitable again. This is a more favorable option than Chapter 7 bankruptcy, which requires the firm to liquidate all assets and go out of business. Chapter 1 and 15 do not exist as bankruptcy options in the United States. Chapter 11 bankruptcy allows companies to restructure their debts and operations, while continuing to operate their business. This is in contrast to Chapter 7 bankruptcy which involves liquidation of assets to pay off debts. Chapter 1 and Chapter 15 are not valid options as they do not exist in the bankruptcy code.

The Legal Filing That Allows a Firm in Bankruptcy the Opportunity