Chapter 11 is designed for reorganization of a business but is also available to consumer debtors. Its provisions are quite complicated and any decision by an individual to file a Chapter 11 petition should be reviewed with an attorney.
What is the process for filing Chapter 11? Either the debtor or its creditors may file a petition for Chapter 11 bankruptcy protection, the latter route referred to as an involuntary petition. Once the petition is filed with the U.S. Bankruptcy Court, the case begins and an automatic stay of all collections actions is put into effect. What does this mean? Essentially, creditors may not pursue existing or new collection activities for unpaid debts unless the court issues a modification to the stay. This provides an opportunity for the debtor to draft a reorganization plan and negotiate more feasible repayment terms without worrying about its debt obligations.
After the petition is filed, the business (or, in other circumstances, the consumer) continues about its affairs without interruption. Meanwhile, under the supervision of the bankruptcy court, the debtor turns its attention to figuring out a repayment plan for its creditors. As with other types of bankruptcy, repayment amounts typically are much lower than the original debt totals. Throughout the duration of the case, the debtor may review its creditors' claims and make objections where it makes sense. Monthly operating reports filed by the debtor keep the court apprised of its progress.
THERE ARE BENEFITS AND DETRIMENTS TO ANY BANKRUPTCY, AND YOU SHOULD SEEK PROFESSIONAL COUNSELING BEFORE FILING A BANKRUPTCY. RALPH SCOTT BOWIE IS A BOARD-CERTIFIED CONSUMER BANKRUPTCY ATTORNEY AND A BOARD-CERTIFIED BUSINESS BANKRUPTCY ATTORNEY, CERTIFIED BY BOTH THE AMERICAN BOARD OF CERTIFICATION AND THE LOUISIANA BAR ASSOCIATION BOARD OF LEGAL SPECIALIZATION. WHEN YOU ARE CONSIDERING HIRING A BANKRUPTCY ATTORNEY, YOU HAVE A RIGHT TO KNOW WHICH ATTORNEYS HAVE MET THE STRINGENT STANDARDS FOR CERTIFICATION AS AN ATTORNEY. WHY SETTLE FOR ANYTHING LESS? CALL US IN SHREVEPORT AT 318-221-0600, OR IF YOU ARE OUT OF TOWN CALL US ON OUR TOLL FREE NUMBER 1-800-256-9470 FOR AN INITIAL FREE CONSULTATION TO DISCUSS OPTIONS IN BANKRUPTCY TO RESOLVE YOUR PROBLEMS.