What is Chapter 11 bankruptcy?

Bankruptcy is a legal way to manage overwhelming debt, whether for individuals, corporations, or even local governments

Chapter 7 is for liquidating personal assets to clear debts, Chapter 13 allows a repayment plan for individuals, and Chapter 11 lets businesses reorganize to stay afloat.

The most common types of bankruptcy filings are Chapter 7, Chapter 11, and Chapter 13

However, there are actually six types in practice today. These less-common options can be lifelines for foreign businesses operating in the US, local governments, and farms and fisheries.

Congress has the power to enact laws related to bankruptcy, thanks to the US Constitution

It has done just that since 1800. This legislation, which outlines the various types of bankruptcy filings, has evolved over time. The most recent iteration is the Bankruptcy Reform Act of 1978, which introduced Chapter 11 filings in an effort to make the process easier for businesses and individuals.

Every year, nearly 500,000 bankruptcies are filed in the US

From personal hardships to major corporate collapses like Enron and Bed Bath & Beyond, filing for bankruptcy isn't a quick fix or a “get-out-of-jail-free” card—it’s a complex, structured process offering debt relief or repayment options.

Chapter 7 and Chapter 11 filings can impact common stockholders

Publicly traded companies don’t file for bankruptcy out of nowhere—there are typically warning signs in a stock’s performance, quarterly earnings calls, and US Securities and Exchange Commission filings.

Some people make too much money to file for Chapter 7 bankruptcy

Chapter 7 is the most popular type of filing for individuals needing relief. However, to be eligible, debtors must pass an income means test. At the most basic level, they must prove that their average monthly income over six months is below their state’s median. But there are exceptions.

Brush up on your bankruptcy vocab

The technical term for what happens when a court removes a debtor’s obligation to repay money owed is “discharge.” An “automatic stay” is what goes into place once a filing occurs to prevent a debtor from facing lawsuits, evictions, and other negative consequences until the process wraps up.

Sears filed for Chapter 11 bankruptcy in 2018

Although the retailer may have failed financially speaking, some argue that longevity in itself is a success—the brand operated for over 130 years before that bankruptcy filing, after all.

WeWork, once a unicorn, declared bankruptcy in 2023

This podcast episode chronicles the complete rise and fall of WeWork—from its founding in 2010 to its eventual 2023 bankruptcy.

Investment banking giant Lehman Brothers filed for bankruptcy in September 2008 when it had $619B in debt, making it the largest bankruptcy ever in the US

Nearly all of its 26,000 employees immediately lost their jobs. But in London, a few hundred remained tucked away, working for another decade to wind down the bank’s European business.

Red Lobster lost $11M on endless shrimp promotions—but its real estate holdings were what dragged it to bankruptcy

Golden Gate Capital, a PE firm, bought Red Lobster in 2014 for $2.1B. Golden Gate then sold Red Lobster's real estate, more than 500 storefronts, which generated $1.5B in revenue and helped finance the PE firm's acquisition of the company. Analysts say increased debt, high rent costs, and low equity put Red Lobster in an impossible position, leading to its 2024 bankruptcy filing—although the shrimp bill probably didn't help.

Hooters filed for bankruptcy in March 2025 after being operated by two very distinct operations

For years before that filing, the restaurant group had been operated by two different companies: one owned by private equity, and the other that includes the original founders.

There’s an artificial intelligence model trained on bankruptcy law

Although it's designed for lawyers, the tool is able to help everyday browsers synthesize important cases and point users to relevant documents about them. One sample using it asks Chatlaw to explain the significance of a recent case and then to define relevant terminology.

401(k) is a section of the US tax code

How did 401(k) plans get their name? Check out the 401(k) section (and subsection) of the US tax code made famous by benefits consultant Ted Benna. Tap into your inner accountant and check out the now-famous portion of the dense, 10,000-section tome that is the Internal Revenue Code.

What is buy now, pay later?

The buy now, pay later industry allows consumers to buy something immediately and pay in installments, typically without the need for applications or credit scores associated with credit cards. BNPL has boomed in the last decade, led by fintech companies Affirm, Klarna, and Afterpay, which have targeted young adults. Some critics say BNPL is a reinvented version of payday loans that allow borrowers easy access to cash with relatively few barriers.

How to prepare your finances for a layoff

Getting laid off is often unexpected—but that doesn't mean you can't plan for the worst, financially speaking. This article provides a few key tips on how and when to get your finances in order if you're worried about being laid off, such as looking into the cost of replacing employer-sponsored benefits like healthcare. Read more here.

Breaking down the main classes of intellectual property: trademark vs. copyright vs. patent

Trademarks, copyrights, and patents are all intellectual property classifications that give exclusive ownership of ideas and concepts to individuals or businesses. Patents usually refer to innovative products or processes, copyrights are centered around the right to reproduce content, and trademarks usually involve branding elements, like names, logos, and distinct product elements.

What are business credit scores?

Businesses have credit scores the same way individuals do—with a few key differences. For one thing, business credit scores range from 0 to 100 instead of 300 to 850, and are based on factors such as bankruptcy and bill-paying habits.

After the 9/11 terrorist attacks in New York City’s Financial District in 2001, many banks decided to relocate

Much has been said about why today’s top banks are typically no longer headquartered on Wall Street itself. The terrorist attacks in New York City’s Financial District on Sept. 11, 2001, are one reason many banks decided to relocate.

How Netflix battled Blockbuster

The most consequential business stories involve intense rivalries. The story of Netflix versus Blockbuster is one of those: an agile upstart versus an entrenched incumbent. This nine-part podcast explores the key strategies and pivotal moments in the rivalry that upended the entertainment business, setting the stage for the streaming wars.

How popular are America's billionaires?

The US has more billionaires than any other country, and they are a mix of media moguls, entrepreneurs, and entertainers. This list ranks the 10 richest Americans by their popularity. The oracle of Omaha, Warren Buffett, ranks highest in favorability at 52%, while Google cofounder Sergey Brin ranks lowest—likely because 72% of respondents didn't recognize his name.

What is a lien?

A lien is a legal claim or right to someone else's property, such as a home. For instance, if someone wins a lawsuit against you and they can’t immediately collect the money you owe them, they might have the right to file a lien against your property.

Harvard Business School adapted its law school's ‘case method’ in MBA classes

Many MBA programs include classes structured around the “case method” rather than traditional lectures. In classes using the case method, students solve real-world business problems without being given the answers ahead of time, rather than listening to a lecture and taking notes.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

H-1B visas let US employers hire skilled foreign professionals in specialty occupations

The H-1B is the main US program for temporary high-skilled workers, covering roles in technology, engineering, medicine, and finance. Issued for up to six years, it often serves as a pathway to permanent residency.

The data on sequels in 11 charts

Sequels, reboots, and other adapted content are generally on the rise in Hollywood, with nearly half of all movies based in some previous film or story. This set of 11 charts dives into the data on sequels, including their budgets, critical success, performance in relation to the original, and more.

The United States is one of only around two dozen countries with a fully federal system of government, in which power is divided between national and state governments.

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

Watch this video that uses Lego bricks to explain how venture capital works.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

After the Boston Tea Party, colonists switched to coffee, which became the main morning drink for revolutionaries.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

11 people died from firework injuries in the US in 2024.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

In 1939, baseball star Lou Gehrig delivered his inspirational 'Luckiest Man' speech after retiring due to the health condition that now bears his name.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

According to the physics of black holes, our 4D reality may be a hologram—a projection of information coded on a 2D surface on the edge of the universe.

Read a deep dive on the 'all-purpose healing' peptide BPC-157.

Long before Major League Baseball began allowing instant replay for balls and strikes, an umpire reluctantly used the technology to determine whether a hit was a home run, a move that inadvertently ushered in a new era for the sport.

Louisiana's 'Cancer Alley' is infamous for having some of the highest industrial pollution, toxic air emissions, and cancer risks in the US.

Dirty lightning is a thunderstorm created from friction between rising and falling flows of ash and smoke during volcanic eruptions.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Sears sold DIY house kits starting at $600 in its famous catalog from 1908 through the 1940s, resulting in roughly 10,000 'Sears and Roebuck houses' being built.

A small portion of The Winstons' 'Amen, Brother,' an obscure '60s gospel record, is the basis for thousands of hip-hop tracks, making it one of the most sampled records ever that's informally known as 'the Amen break.'

Animal phobias are likely the most common type of phobias, followed by an extreme fear of heights.

Legendary architect Frank Lloyd Wright designed the SC Johnson headquarters in Wisconsin, aiming to make a cathedral-like workplace

To reduce wrinkles in clothing, research recommends gentle wash cycles with more water and tumble drying with smaller loads and longer times.