Filing Chapter 11Chapter 11 bankruptcy is a type of bankruptcy which originally aids businesses who are struggling because of debts, thus not a lot of people knows it. Unlike Chapter 7 and Chapter 13 bankruptcy which aims to bring debt relief for individuals, marriage couples, partnerships, corporations and other business entities.
Most business owners would prefer Chapter 11 to be the last thing they want to hear. If cannot be helped and you need to file Chapter 11, don’t worry because you can continue your business while settling debt issues with creditors.
Filing for Chapter 11 bankruptcy: How it helps you?
In Chapter 11, you get the privilege to reorganize your finances, assets and wealth. Your business’ daily operation cannot be affected and can operate as usual and you can keep your properties. You are then considered a “debtor in possession.”
Yet, keep in mind that the court will not touch your business once they find out you committed fraud in your gross reports. If this happens, you can’t make any business decisions and changes without permission from the court. A bankruptcy trustee will handle the business.
Filing Your Chapter 11 Bankruptcy
You begin Chapter 11 by filing a bankruptcy petition in the court, the same with how you begin in other chapters of the Bankruptcy Code such as Chapter 7 and Chapter 13.
Chapter 11 bankruptcy can be filed in two ways, through a voluntary petition which you file as a debtor and involuntary petition which is filed by your creditors under specific requirements.
After the filing, you can receive a helpful gift because the court will release an automatic stay. This stops your creditors from making any kind of collection of unpaid debts, filing a lawsuit against you, and most importantly, stops harassment.
Chapter 11: Requirements You Must Comply To
You must have an idea already that when law is involve, you have to prepare documents and fill out quite a lot of them, and meet some qualifications.
So here are the requirements you should prepare before filing for Chapter 11:
-You must undergo credit counseling from a government-approved credit counseling agency days prior to filing you bankruptcy case. Make sure to obtain a certain as a proof that you have completed the course.
-Prepare a petition if it is for voluntary or voluntary petition.
-Prepare necessary documents such as schedules of creditors who have unsecured claims, executory contracts and unexpired leases, income, expenses, statement of financial affairs
Chapter 11: Reorganization Plan
As a debtor filing for brooklyn ny foreclosure attorneys Chapter 11, you have to develop a reorganization plan and present it to your creditors.
Make rational payment terms which you and creditors can benefit from. brooklyn ny foreclosure attorneys State clearly the claims of each of the creditor. This way, you can easily negotiate and receive approval from the creditors’ committee who represent all your creditors to evaluate your proposed plan.
Chapter 11: Discharge
If your reorganization plan is made without the intent of fraudulence and dishonesty and does not violate the law, the court will approve it immediately. Thereafter, you can pay certain debts according to the plan which is both convenient.