Chapter 11 of the U.S. bankruptcy code is designed to allow a business to have protection from creditors while working to reorganize. A Chapter 11 filer usually proposes a plan of reorganization to keep its business going and to pay creditors over time. There are six major steps in the process.

1. A company filing for Chapter 11 protection files a petition in bankruptcy court.
   
   
2. After filing, the company is referred to as the “debtor in possession” because the debtor keeps the business and its assets and continues to operate it.
   
   
3. The debtor in possession must file:
                a.  A list of creditors
                b.  A schedule of assets and liabilities, current income and expenditures
                c. A statement of the debtor’s financial affairs
   
   
4. The debtor in possession must file a plan for reorganizing the business 120 days after filing the petition. An appointed trustee may also file a plan, and the creditors have the right to file a plan under certain circumstances.
   
   
5. Creditors have the right to approve the plan. These creditors include specified “classes” of creditors, including shareholders, secured creditors and unsecured creditors. Each class has certain voting rights, depending on the number and the nature of the classes and the overall vote of creditors. If creditors approve the plan, the bankruptcy court must also confirm it
   
   
6. If the plan is successful, the debtor is discharged from debts incurred before confirmation of the plan and the business may continue to operate.

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