Which bankruptcy type is typically used for reorganization of businesses?

Chapter 11 Bankruptcy is specifically designed for the reorganization of businesses. This type of bankruptcy allows companies that are struggling financially to continue operations while developing a plan to restructure their debts. It provides a framework for businesses to negotiate with creditors, potentially reducing their debt burden, extending payment timelines, or even obtaining new financing to support ongoing operations.

In Chapter 11 cases, the business remains in control of its operations as a "debtor in possession," which means that the current management can continue to run the business while they work on their reorganization plan. Once the plan is confirmed by the court, the business can emerge from bankruptcy with a new lease on financial health, equipped with a sustainable way to operate moving forward.

Other options pertain to different scenarios: Chapter 7 leads to liquidation of assets, Chapter 13 is intended for individual debtors with regular income to create a repayment plan, and "Suspension of License" is not a recognized form of bankruptcy but rather a potential regulatory action against a professional license. Therefore, the focus on reorganization distinctly identifies Chapter 11 as the correct answer.