In the United States, individuals and organizations that have taken on debt that they fear they will be unable to pay back have the option of filing bankruptcy, a proceeding that allows them to either liquidate their assets to pay debts or to create a revised payment plan that provides them with more flexibility. There are a number of different chapters in the U.S. Bankruptcy Code – with the majority of bankruptcies filed as either Chapter 7, Chapter 11, or Chapter 13. Chapter 11 is a type of bankruptcy proceeding that involves reorganizing financial debts in a way that permits assets to be retained, though some may be liquidated as part of the process. If you are in need of bankruptcy relief and are looking for assistance and advice, the bankruptcy attorneys at Erik B. Jensen Attorneys at Law have extensive experience and are ready to be of service.
When an individual or a business files a petition for Chapter 11 bankruptcy, the petitioner is granted an automatic stay from the enforcement actions of their creditors. This means that all collection efforts must stop, creditors cannot file a lawsuit for the collection of funds, and liens and foreclosure actions cannot be filed against property. Despite the filing, a business that is under Chapter 11 bankruptcy continues to operate, though it does so under the supervision of the bankruptcy court. In some cases a trustee may be appointed for the protection of the creditors’ interests. The debtor is able to hold onto their assets and to submit a plan for reorganization of debt that may extend the amount of time available for repayment, may reduce the amount of payment to be submitted, or both.
Chapter 11 reorganizations can involve lowering interest rates or removing terms that are making repayment challenging. It also may allow for certain contracts to be cancelled if they no longer provide a benefit to the debtor. Chapter 11 is designed to provide the opportunity for the individual or business to return to economic wellbeing.
Though Chapter 11 bankruptcy filings are most frequently used by businesses, it does offer some advantages for individuals, most notably the ability to hold onto property. When a business files for Chapter 11 bankruptcy, the only assets that are able to be reorganized are those that belong to the business itself. The reorganization itself requires an approval vote of the creditors who are most impacted. Those creditors are tasked with representing the interests of all those to whom the petitioner owes money.
Filing for Chapter 11 allows a great deal of flexibility, but it is also the most expensive type of bankruptcy for a debtor to enter into. If you are unable to pay your debts and are considering filing for bankruptcy, one of the knowledgeable bankruptcy attorneys at Erik B. Jensen Attorneys At Law can provide you with reliable advice on which approach is best for you, and help you navigate the complexities of the process.
Learn more about our Chapter 11 Lawyers and Chapter 11 Bankruptcy here –
https://www.yourphiladelphialawyers.com/practice-areas/bankruptcy-law/chapter-11/
