Chapter 11 bankruptcy

A type of bankruptcy that allows a business to retain control of its operations while it plans how to reorganize its debts. Chapter 11 is the most common type of bankruptcy. Creditors are prevented from pursuing a company that is in a Chapter 11 proceeding. The debtor and creditors meet to draw up an agreement for repaying some of the debt. In a Chapter 7 bankruptcy, in contrast, the company closes its doors and liquidates its business. See also Chapter 7 bankruptcy, Chapter 13 bankruptcy.