How does Chapter 11 bankruptcy work?
Chapter 11 is a type of bankruptcy that allows individuals or businesses to repay some or all of their debts over an extended period of time, often with very little interest.
Individuals or business must set forth a plan of reorganization which is reviewed by the Court and then voted on by creditors for approval.
It can be used to become current on missed mortgage payments, lease payments, and even car payments.
Unlike Chapter 13 bankruptcy, Chapter 11 bankruptcy can also be used reorganize business entities and is the primary option for corporations that are looking to use bankruptcy as a tool to reorganize their debts.
Many famous corporations have successfully reorganized under Chapter 11 Bankruptcy including the Los Angeles Dodgers, Chrysler LLC, and General Motors Corporation.
Who is eligible for Chapter 11 bankruptcy?
Individuals with regular sources of income are eligible for Chapter 11 bankruptcy and corporations.
Corporations typically file Chapter 11 with the plan of emerging from bankruptcy with less debt and lower monthly expenses but sometimes file bankruptcy for the purpose of liquidating through the bankruptcy process.
Individuals who are not otherwise eligible for Chapter 13 bankruptcy because their total secured debt exceeds $1,257,850.00 or they have more than $419,275.00 in unsecured debt may wish to file for Chapter 11 bankruptcy if they need an avenue to reorganize their debts.
Who is a good candidate for Chapter 11 Bankruptcy?
How do I know if Chapter 11 Bankruptcy is right for me?
Although Chapter 11 Bankruptcy is a very powerful tool, it is not always the best choice for all individuals or corporations facing financial problems.
Speak with a Los Angeles Bankruptcy Attorney today to determine if filing for Chapter 11 bankruptcy is the right option for you or your company.