Chapter 11 is much more complicated. The goal with this type of bankruptcy is to restructure the debt in a way that is suitable for all involved. It requires a much more formal plan for repayment and creditors have a larger say in the process. Seriously consider hiring a knowledgeable attorney if you are considering this option. The “debtor in possession” as you are called, has many more responsibilities.
In a Chapter 11, and usually acts as their own trustee during the bankruptcy. That’s why typically, individuals choose Chapter 7 over 11. However, businesses and partnerships have more and better options in a Chapter 11 bankruptcy. In a Chapter 11 bankruptcy a written disclosure statement and a plan for reorganization must be filed with the court. The disclosure statement is a detailed document that must contain all the assets, liabilities, and business details of the debtor. The disclosure statement must give a creditor enough information to make a well-informed judgment about the reorganization plan.
The information required is governed by judicial discretion and the circumstances of the case as well as bankruptcy law. If a creditor will be paid less than the full value of their claims under the plan, they get to vote on the plan by ballot. After the disclosure statement is approved and the ballots are collected and tallied, the bankruptcy court will conduct a confirmation hearing to determine whether to confirm the plan.
The advantage to the debtor in a Chapter 11 bankruptcy is they don’t have to liquidate all assets. For a business, this means they do not have to go out of business but, with a well organized plan, can survive and perhaps even thrive in the long run.