What is “Reorganization Bankruptcy”?
Chapter 11 is basically reorganization bankruptcy. It is available to individuals, partnerships, and corporations. With Chapter 11 there are no limits on the amount of debt you have, as opposed to Chapter 13, which does have debt limitations. It’s usually the form of insolvency that large businesses choose when seeking to restructure their debt.
Individuals may also file Chapter 11, but due to the complexity and great expense of the proceeding, this option is rarely advantageous for debtors who are eligible for Chapter 7 or Chapter 13, therefore most individuals opt to file 7 or 13 rather than 11.
What Do I Need To Provide?
In order to complete and file Chapter 11, you must provide the following information:
- A list and some background detail on all creditors (amount owed, date incurred).
- Information and detail regarding the filing, and your income.
- A list of all of your property.
- A detailed list of your monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
- Driver License
- Social Security Card
- A Copy of Your Taxes From the Year Prior to Filing
- A Valid Certificate of Credit Counseling
What is the Process?
Normally, the Chapter 11 debtor has the exclusive right to propose a plan of reorganization for their debts during the first 120 days after filing. This exclusivity period can be extended or reduced by the court, but will never be prolonged longer than 18 months. During this period of time, creditors who wish to file competing plans must convince the court to terminate the debtor’s exclusivity period.
The exclusivity period will also be terminated if a trustee is appointed. Often times after evaluating the information, there is a group that does not agree with the debtor’s plan of reorganization. At that point it is up to the judge to resolve the issues with the reorganization plan.
What are the Benefits?
In most cases, the debtor in a Chapter 11 remains in possession of their assets, and will continue to operate their business under the supervision of the court. This allows the debtor the opportunity to improve their business performance; which will in turn benefit their creditors.
Let Us Assist You
Chapter 11 Bankruptcy cases are difficult and very expensive. This is why having an experienced attorney is vital. Let us assist you with your case. We offer free consultations to prospective clients. Contact us today (888) 728 0044, or email us.