Understanding Bankruptcy Chapter 11
Chapter 11 bankruptcy is commonly known as a “reorganization” bankruptcy case. Voluntarily filing Chapter 11 bankruptcy is the only reorganization option available to individuals who don’t meet the eligibility requirements for Chapter 13. It is also the reorganization option available for businesses, though small businesses can be disincorporated with assets and liabilities transferred to the proprietor before they file Chapter 13.
At my firm, the Law Office of J. Scott Logan, LLC, I have helped many clients with Chapter 11 bankruptcy. While it allows businesses including corporations, sole proprietorships and partnerships to remain operational and in control of the assets of their business, Chapter 11 can be an expensive process in which creditors have control over the outcome of the debt restructuring. The process of Chapter 11 involves creating a proposed plan for the reorganization. Creditors may vote on accepting part or all of the plan. When the voting is complete and other legal requirements are met, the court may confirm the reorganization plan. To avoid the creditor voting process, please ask me about the new Subchapter V option in Chapter 11.
Unvarnished Record Disclosure Is Critical
The key to successful bankruptcy filings is your honesty. You must provide full disclosure of your financial records, including cohesive lists of:
- All financial assets and debts
- Current income sources
- All expenditures
- All contracts for goods and services
- Unexpired leases
You will also complete and file a statement of your financial affairs summarizing how you have come to be in these financial circumstances and your future intentions. There may be rare occasions when the court orders otherwise.
Individual debtors or a married couple filing Chapter 11 bankruptcy jointly will also need to file:
- A certificate of credit counseling
- A debt repayment plan developed through credit counseling
- Proof of employment and income received 60 days before filing Chapter 11
- A statement of monthly net income
- A statement of any expected pay raises
- A statement of increases or unusual expenses after filing
Most of my clients who are eligible for Chapter 13 prefer that route. However, Chapter 11 is a viable alternative.
Get Knowledgeable Counsel, Advice And Legal Representation
I am J. Scott Logan. I have more than 15 years of experience assisting my clients throughout Maine with their bankruptcy questions and filings. I look forward to helping you. Call my law firm, the Law Office of J. Scott Logan, LLC, in Portland at 207-613-8590 to arrange for a free consultation. You may also send me an email to do the same.
Law Office of J. Scott Logan, LLC, is a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.