But how will this affect the most vulnerable people in this situation? We're talking about PG&E's customers, employees, and shareholders.
Here's what we found out:
RELATED: PG&E to file for Chapter 11 bankruptcy, CEO resigns
What does this mean for customers?
Your power and gas will stay on
Chapter 11 allows a company to keep operating while the courts decide what to do with all that piled up debt.
PG&E Statement: "The Company does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process."
Your PG&E bill could increase (significantly)
When PG&E filed for bankruptcy during the 2001 energy crisis, customers ended up paying around $1,300 to 1,600 dollars in higher rates.
Customers are still paying for that today.
If you look at your bill, there's a line item listed under "DWR Bond Charge." That's the money you're still paying for that energy purchased by the state 18 years ago.
OR... Your PG&E bill could decrease
This time around, the Public Utilities Commission (PUC) bases rates on how much a utility spends to provide those services.
If the debt is forgiven and PG&E's expenses drop, your electric rates could drop, too.
Of course, there could be massive borrowing between now and then and that could erase any potential savings.
Wildfire victim compensation payments will be impacted
The utility is facing dozens of lawsuits from the North Bay Wildfires in 2017 and The Camp Fire in 2018.
Bankruptcy means those lawsuits will be put on hold until a plan is sorted out.
Attorney Frank Pitre, who represents several Camp Fire victims, expects a delay for his clients to be compensated, but he believes they will still get the same settlements.
RELATED: PG&E reportedly could face murder charges for deadly Camp Fire
Some experts worry that the victims may never get compensated.
With a bankruptcy, all debt before the filing is up for grabs and creditors get a first shot at the cash.
Charitable Giving to the community is on hold
The utility stated that it had granted more than $100 million to community organizations since 2000, including $28 million in 2018 alone.
PG&E says all of that is now on hold.
PG&E released this letter to its customers about the bankruptcy filing
What does this mean for PG&E employees?
They will still get paid and receive healthcare benefits
PG&E said in a statement that employees will still get paid during the bankruptcy proceedings.
The utility also said they do not expect any changes to the company's tax-qualified pension plan or to health & life insurance benefits for retirees.
But they did they would have more information later on an impact to the Company's "non-tax-qualified" pension plans.
But in the long run, their pensions and benefits could be at risk
With Chapter 11 bankruptcy, companies can seek to modify labor agreements.
That would allow PG&E to change employee pension plans and benefits.
Bankruptcy courts could also completely nullify a collective bargaining agreement.
But Union leaders believe those changes are unlikely to happen.
RELATED: PG&E CEO steps down as company faces possible bankruptcy
In the 2001 bankruptcy, PG&E filed a motion to confirm the union agreements and maintain staffing levels. Union leader seem hopeful that will happen again.
The 2017 state wildfire bill (SB 901) also included some protections for workers if PG&E filed for bankruptcy.
The bill's language states the PUC will seek a plan that's "fair and reasonable to affected public utility employees."
PG&E released this document about the impact on its employees.
What does this mean for PG&E shareholders?
Shareholders could end up getting completely wiped out
Shareholders will be hurt. How badly depends on what the courts decide.
However, it's not unthinkable that stockholders could lose half or even all of their worth.
PG&E's stock has lost more than 80 percent of its value over the last three months, and it plunged even further after the bankruptcy was announced.
RELATED: PG&E looking to sell off its natural gas division as early as this spring to cover possible wildfire payouts
Shareholders will keep losing out on dividends
During the 2001 bankruptcy, investors lost out on about $1.7 billion in dividends.
PG&E already suspended dividends in 2017 in response to the North Bay wildfires.
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