Bankruptcy itself is not an enemy to your finances, and you should not see it that way—unless you never want to get out of debt. Contrary to the widespread opinion that filing for bankruptcy will hurt you, Chapter 11 is not the end of the world, nor does it make you forever ineligible to receive credit. Bankruptcy status is a way to find financial relief to overwhelming debt, so that you can build a brighter financial future. At some point in time, many people experience financial woes. If you find that there is no end to your financial struggles that you can manage, filing for bankruptcy should be considered as finally taking charge of your finances.

What is Unique About Chapter 11?

Unfortunately, Chapter 13 and Chapter 7 bankruptcy laws do not always provide businesses with the financial relief they need. Commonly referred to as “the reorganization chapter” of the bankruptcy code, Chapter 11 allows you to reorganize your debt and keep most of your assets. Through the sale of certain assets (mostly of your choosing), you are allowed to use the profits to pay down your debt and refinance current debt. Filing for Chapter 11 bankruptcy is typically more beneficial for businesses; however, individuals can also file for Chapter 11 bankruptcy.

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Cumulus Media, Inc., the second-largest radio company in the United States, recently filed for Chapter 11 bankruptcy. The company has existed since 1958, when it began its life under the name Midwestern Broadcasting.

The media company filed for bankruptcy as a way to work down its outstanding debt by $1 billion. Currently, it has $2.4 billion in debt. The Atlanta-based company plans to use Chapter 11 as a way to restructure and become profitable once again.

The Scope of Cumulus Media and its Largest Competitor

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Aquion Energy, the Pittsburgh-based energy storage company founded in 2007 that focused on the development of salt water batteries, has filed for Chapter 11 bankruptcy. Although the company has halted production and marketing of its products and cut its workforce substantially, its leaders are optimistic that bankruptcy will help the company become profitable once again and allow it to continue to make innovations in its industry. The company's CEO stated that this is an “important phase” for the company as it works to secure a buyer for all its assets.

Insurmountable debt is an issue that can plague any company, regardless of its size or industry. From 2014 to 2016, Aquion Energy raised approximately $90 million from investors including Bill Gates, members of the Pritzker Family, and venture capital firm Kleiner Perkins Caufield & Byers. It also received $5.2 million from the United States Department of Energy to open a manufacturing plant and create 400 jobs. It was also approved for more than $16 million in grant money from the Pennsylvania Department of Community and Economic Development.

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Lily Robotics, a startup that quickly amassed tens of millions of dollars in pre-orders from around the world following its release of a viral video showing its prototype of an autonomous flying camera in 2014, has filed for Chapter 11 bankruptcy protection. After close to three years, numerous loans and investments still could not help the company and its vendors build a drone that worked to the design's specifications.

The company promised refunds to those who pre-ordered the product. Because a working product was not produced and there is no inventory to sell, Lily Robotics is selling another asset to recoup as part of its bankruptcy - its patents and other intellectual property.

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Limited Stores LLC, the parent company behind women's apparel retailer The Limited, filed for Chapter 11 bankruptcy in January of 2017. It did this after receiving advice from corporate financial advisors in late 2016 and liquidating its remaining inventory at steeply discounted prices during the 2016 holiday season. It has closed all of its 250 stores and temporarily suspended online sales.

Like other brick-and-mortar retailers that have shuttered in recent years, The Limited pointed to declining mall traffic, the rise of ecommerce, and changing consumer tastes and values as the reasons behind its decline. In the years since its inception, The Limited had grown and diversified. At one time, it was part of a group of retailer brands that included Lane Bryant and Bath and Body Works. These companies are currently owned by other parent companies.

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