Which chapter of bankruptcy is typically used by corporations to reorganize debt?

Chapter 11 bankruptcy is specifically designed for corporations to restructure and reorganize their debt while continuing their operations. This chapter allows businesses to propose a plan to pay creditors over time, which enables them to keep their operations running while working through financial difficulties. The reorganization process under Chapter 11 can offer the company protection from creditors during the restructuring period and provides a way for the company to emerge as a viable entity.

In contrast, Chapter 7 bankruptcy involves liquidating the company's assets to pay off creditors, which typically means the business ceases operations. Chapter 13 bankruptcy is more suited for individuals with a regular income who want to repay their debts over a set period, while Chapter 12 is designed specifically for family farmers or fishermen facing financial distress. Thus, Chapter 11 clearly stands out as the appropriate framework for corporate debt reorganization.