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Guide to Chapter 11 Bankruptcy
Chapter 11 Bankruptcy is similar to chapter 13, in that debts are "reorganized" into a payment plan that allows debtors to repay their debts over time. This type of bankruptcy is much more complicated and expensive than other types of bankruptcy, and is usually only used by businesses.
The Chapter 11 Process
In order to begin the chapter 13 process, a petition must be filed with the local bankruptcy court. This petition can be filed "voluntarily" by the debtor, or "involuntarily" by certain qualified creditors. Other paperwork that must be filed with the bankruptcy court include:
- Schedule of Assets and Liabilities: This is a detailed financial list of all assets and debts, much like a businesses balance sheet.
- Schedule of Current Income and Expenditures: This lists out all income amounts and sources, as well as expenses.
- Schedule of Executory Contracts and Unexpired Leases: This is a summary of all contractual requirements such as rental leases, cell phone contracts, car or truck leases, etc.
- Statement of Financial Affairs: This questionaire is provided by the bankruptcy courts and contains a wide array of questions about the debtors financial history
Chapter 11 Eligibility
In order to file bankruptcy under chapter 11, an individual or business must meet the following general requirements:
- In prior 180 days, the debtor did not have a bankruptcy petition dismissed due to failure to appear or follow court orders.
- Credit Counseling must have been completed within 180 prior to petitioning for bankruptcy.
- Under chapter 11, there are no general limits on amount of debt.
There are many other considerations prior to filing for chapter 11 bankruptcy. Only a qualified bankruptcy lawyer can determine if this type of bankruptcy is right for a given situation. Consulting with an attorney is the first step in decideing to file for bankruptcy.
- If you need help with filing bankruptcy, click here for a Free Case Review with a Bankruptcy Lawyer near you. The content of this website is provided for informational purposes only, and nothing here should be taken as legal advice.
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