Chapter 11 Bankruptcy

Sometimes, getting a handle on your debts is merely an issue of reorganization. Typically utilized by corporations and other business entities, Chapter 11 bankruptcy allows for exactly this type of reorganization. This can help keep your business intact while you devise a repayment plan to start eliminating your debt.

Filing a Plan for Reorganization

This part of the United States Bankruptcy Code is often nicknamed “reorganization” bankruptcy because this is the main aspect of this form of debt management. It can be filed by a debtor, called a voluntary petition, or even by creditors, called an involuntary petition. In both cases, the debtor remains as a “debtor in possession” during the restructuring.

While the plan for reorganization is being developed, the debtor will remain in control. However, once the plan is approved by the court, this type of bankruptcy can be dismissed, converted to Chapter 7, or put under the supervision of a court-appointed trustee. Appointing a trustee is an uncommon resort that occurs more often in other chapters of bankruptcy. However, there is typically a trustee who monitors the case without taking over completely.

When a corporation files for Chapter 11, stockholders are usually only at risk up to the amount of their investment. On the other hand, since individuals may sometimes decide to file for Chapter 11, their personal property can be considered part of the assets.

Due to the many rules and regulations that go along with all of the different chapters of bankruptcy, deciding the chapter that’s right for you can be confusing. To help you get through this difficult time, you should seek the advice of a bankruptcy attorney.

Contact Us

For more information regarding Chapter 11 and other types of bankruptcy law, contact the experienced New Orleans bankruptcy lawyers of Kervin & Young today at 504-599-5906.