What is Chapter 11 Bankruptcy?
Prior to entering a Chapter 11 bankruptcy, it is important to have a clear and comprehensive understanding of what is Chapter 11 bankruptcy. A Chapter 11 is a provision in bankruptcy law that enables businesses to seek relief from overwhelming debt by restructuring the finances of the business. Before filing a Chapter 11 bankruptcy, there are certain requirements that have to be met.
WHAT IS CHAPTER 11 BANKRUPTCY: REQUIREMENTS
A debtor may not file for a Chapter 11 bankruptcy:
- If a previous Chapter 11 bankruptcy filing was dismissed as a result of the being unable to comply with the orders of the court.
- If the debtor failed to appear before the court or if the case was voluntarily dismissed once creditor sought relief from the court to recover assets on which they hold liens.
- The debtor may also not file a Chapter 11 bankruptcy before completing the credit counseling and debtor education requirements.
WHAT IS CHAPTER 11 BANKRUPTCY: THE PETITION
A chapter 11 bankruptcy petition includes all the financial documents of the organization that demonstrate that the company is indeed financially distressed. The debtor is also required to include a standard bankruptcy form provided by the court. Proof of financial hardship include:
- schedules of assets and liabilities;
- a schedule of current income and expenditures;
- a schedule of executory contracts and unexpired leases;
- a statement of financial affairs;
- certificate of credit counseling; and
- debt repayment plan
Depending on finances of your particular situation, the court may request for additional documents.
CHAPTER 11 BANKRUPTCY LAWYERS
A Chapter 11 bankruptcy can be a long and complicated process, but not impossible. Retaining the services of experienced business debt relief lawyers is crucial in obtaining the best possible outcome. In some cases, filing bankruptcy may not be in the best interest . If this is the case, it is important to understand the different debt relief options available to you: