A Chapter 11 most likely is a reorganization of debt that tends to involve a business or partnership. A chapter 11 tends to keep the business alive while paying back the debt owed over time. Chapter 11 is not tied down to business owners but corporations and individuals can file for Chapter 11 bankruptcy. Chapter 11 is most often referred to as “reorganization bankruptcy”.
What Steps Are involved in Chapter 11 Bankruptcy
The Chapter 11 bankruptcy filing begins with filing a petition with the bankruptcy court within the debtor’s service or residence location. The court required case filing fee is $1,000 and a $39 dollar miscellaneous admin fee. This fee must be paid before the filing unless otherwise specified by the court.
About Chapter 11 Bankruptcy
Chapter 11 Bankruptcy Relief is used for business owners. Under Chapter 11 Bankruptcy relief, as debtor, you would retain ownership of your assets, and maintain control of your business. Under Chapter 11, you would be called a “debtor in possession.” As debtor in possession, you run the day to day operations of the business while creditors work with you and the
Bankruptcy Court to negotiate a plan towards repayment. The Chapter 11 plan must be fair to the creditors, and there is an order of priority among the creditors. Creditors are allowed to vote on the proposed plan. If the creditors vote to confirm the Chapter 11 plan, as debtor, you will continue to operate your business and pay your bills under the terms of the confirmed plan. If the creditors do not vote to confirm the plan, the court will take a more active role in shaping the plan, and may impose additional requirements to confirm the plan.