The chapter of the Bankruptcy Code under which a debtor seeks to reorganize its affairs by confirming a plan of reorganization.

A debtor can also use Chapter 11 to liquidate its estate.

While in Chapter 11, the debtor generally continues to operate its business as a debtor-in-possession (unless the bankruptcy court appoints a trustee to operate the business). It is typically used by business entities but in rare cases is used by individuals with complex financial affairs. Chapter 11 can be initiated voluntarily by the debtor or involuntarily by the debtor's creditors. The three forms of voluntary Chapter 11 cases are traditional (or freefall), prepackaged (or prepack) and pre-arranged (or pre-negotiated).

Broadly, a debtor that has property in the US can file an order for relief or bankruptcy petition to commence Chapter 11 proceedings. The debtor does not have to be insolvent to initiate these proceedings. When the petition is filed, an automatic stay comes into effect that prevents any enforcement action or the start or continuation of other legal proceedings against the debtor (§ 362, Bankruptcy Code). The automatic stay technically extends worldwide.

For more information on Chapter 11, see Practice Note, Bankruptcy: Overview of the Chapter 11 Process.