Chapter 11 Bankruptcy
Chapter 11 bankruptcy is primarily used by corporations and businesses as a means to pay creditors and re-organize finances in a manner that allows the business to stay in business. Because of its cost and complexity, individuals do not typically use Chapter 11. However, if you do need to pursue this route, our experienced team of legal professionals at the Law Offices of Steven Dolson have the expertise to help.When Would an Individual Use Chapter 11?
- If individuals have sizable and complicated debt that is business-related, in addition to a great deal of assets or income.
- If they do not qualify for Chapter 7 or 13
- If they own a business that may be jeopardized by Chapter 7
- If they need more flexibility to meet their objectives
Just like Chapters 7 and 13, Chapter 11 begins when a petition is filed and an automatic stay is activated. In Chapter 11, the petitioner becomes a “debtor in possession.” The petitioner maintains business operations and functions similarly to a trustee under other chapters.
A disclosure statement and a plan of re-organization, which outline how the debtor intends to successfully execute the plan, are filed with the court. The creditors whose contractual rights or claims will be modified by the plan then vote on the plan. After the votes are tallied, a judge makes an informed decision based on the vote as to whether or not the plan is accepted. A Chapter 11 bankruptcy is often complex and costly, and can take between several months and several years to resolve.