Chapter 11 bankruptcy is a way for an individual person or a business to be able to make the necessary changes in reorganizing their payments, debts and income streams.
It also is very helpful for those struggling with trying to get on top of their payments while they are being pressured by debt collectors, since filing for Chapter 11 automatically invokes a halt on all debt collection activities for a certain amount of time.
Are you eligible for Chapter 11 bankruptcy?
If you wish to file for Chapter 11 bankruptcy, the most important first step is to find out whether you are eligible. The good news is that Chapter 11 caters for the needs of many different types of situations. You can be an individual or any type of business and file under Chapter 11. It often has the most advantages for businesses that see a new way to organize their revenue streams.
In order to be eligible, you must first proclaim your financial details such as your current income and outgoings, the assets that you own as well as contracts, liabilities and debts. You must have also gone through credit counseling in the 180 days before you file.
You will not be eligible for Chapter 11 bankruptcy if you have failed to make a court date, have violated court orders or been rejected for a bankruptcy filing in the 180 days before you intend to file.
Filing for Chapter 11 bankruptcy could be a wise decision for you and your finances, and can help you gain back financial control. Make sure to conduct thorough research before proceeding to file.
Source: Money zine, "Pros of chapter 11," Oct. 12, 2017