Johnson Law, PLLC Attorney – Help for Businesses and Individuals
At the top of the Chapter 7 page, we mentioned the many circumstances when help may be needed for a business or individual file for bankruptcy, and the three chapters used most often.
Chapter 11 Bankruptcy
Under Chapter 11 Bankruptcy laws, an entity (a business or individual) may choose to file for debt relief. With Chapter 11, you may continue to operate a business, but your creditors and the Court must approve a plan to repay your debts.
There is no trustee unless the Judge decides that one is necessary. If a trustee is appointed, the trustee takes control of your business and property. Chapter 11 is most often filed in the cases of a corporation or partnership. It lets a debtor propose a reorganization plan, so a business may remain in operation and debts are paid to creditors over time.
Other Aspects of Chapter 11:
Trustee/Administrator and Creditors’ Committees
Your Johnson Law, PLLC attorney will go over the other aspects of Chapter 11 Bankruptcy, as they may pertain to your individual matter. These include:
- U.S. Trustee Oversight
- Administration Requirements
- Creditors’ Committees
- Small Business
- Debtor Obligations
- “Exclusivity Periods”
- Financial Reporting
- “Automatic Stay”
- Professional Fees
- Anticipated Length
- Avoidable Transfers
- Protection, Cash, Collateral
A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. There may be limitations to filing if a bankruptcy petition was filed in the six months before and was dismissed for non-compliance or other negative reasons. Prior credit counseling is also necessary before filing for bankruptcy, and if a debt management plan is developed during this time, it must be filed with the court.
Details on the process of a chapter 11 bankruptcy filing include a number of required forms and reports, which our attorney at Johnson Law, PLLC will coordinate with you. There are some forms which may be obtained from legal stationary stores or that may be downloaded from the Internet (at www.uscourts.gov/bkforms/index.html).
As part of the filing, the courts are required to charge a $1,167 case filing fee and a $550 miscellaneous administrative fee. These fees must be paid to the clerk of the court upon filing or may, with the court’s permission, be paid by individual debtors in installments by no later than 120 days after filing the petition. Not paying the required fee can result in dismissal of the case.
After filing the voluntary petition that includes various pieces of identification and intention to file the request for relief, the debtor then assumes an additional identity as the “debtor in possession.” The term refers to a debtor that keeps possession and control of its assets while undergoing reorganization under Chapter 11, without the appointment of a case trustee.
A debtor carries this “debtor in possession” designation until their reorganization plan is confirmed, the case is dismissed or converted to Chapter 7, or a Chapter 11 trustee is appointed. Obtaining a trustee occurs only in a small number of cases. The “debtor in possession,” operates the business and performs many of the functions that a trustee performs in cases under other chapters. Again, our Johnston Law, PLLC lawyer will let you know the particular requirements for your individual case.
For individuals, Chapter 11 bears similarities to Chapter 13. For example, property of the estate for an individual debtor includes the debtor’s earnings and property acquired by the debtor after filing until the case is closed, dismissed or converted; funding of the plan may be from the debtor’s future earnings; and the plan cannot be confirmed over a creditor’s objection without committing all of the debtor’s disposable income over five years unless the plan pays the claim in full, with interest, over a shorter period of time.
If you suffer from burdensome debt, are threatened with foreclosure, are harassed by collection agencies, have wages garnished, or have been injured, then call us. Johnson Law, PLLC charges affordable rates, offers weekday, weekend and evening appointments, as well as flexible payment plans and no obligation consultations. Contact us at 304-292-7933.