Chapter 11 bankruptcy is a form of reorganization bankruptcy that is usually pursued by businesses and corporations. However, individuals may also be able to file for Chapter 11 in some cases. As a reorganization bankruptcy, debtors are not required to liquidate their assets to pay off debts. Rather, they agree to a court-approved payoff plan. Once, the payments of this plan have been successfully completed, any remaining debts covered by the bankruptcy are dissolved.
The first step in filing for Chapter 11 bankruptcy involves the submission of a petition to the regional bankruptcy court. In some cases, the submission will be voluntary and submitted by the debtor. In other cases, the submission will be involuntary and submitted by creditors to whom the debtor owes money.
In the case of a voluntary submission, debtors need to file:
-- Listings of assets and liabilities
-- Records showing current expenditures and incomes
-- Listings of unexpired leases and contracts that have yet to be fully executed
-- A statement of financial affairs, and
-- In the case of individuals filing Chapter 11, they must also submit a certificate of credit counseling, the credit counselor's debt repayment plan, evidence showing employment income within the 60 days before filing, a monthly net income statement that also references anticipated increases and a record of interest on education tuition accounts.
The preparation of any bankruptcy submission can be complicated and time-consuming. Fortunately, a Florida bankruptcy lawyer can assist you in preparing and filing your Chapter 11 bankruptcy application. Your lawyer can also help you evaluate if bankruptcy is appropriate given your current debt situation.
Source: United States Courts, "Chapter 11 - Bankruptcy Basics," accessed June 23, 2017