Chapter 11 Bankruptcy filings are rare for individuals and families. The process is usually utilized by larger businesses to restructure their debts.
Throughout the Chapter 11 Bankruptcy process, the debtor maintains control of its assets and continues to operate under the direction of the Bankruptcy Court for the benefit of its creditors. A creditors’ committee is appointed from among the twenty largest unsecured creditors to represent the rights of all of the creditors.
A Chapter 11 Bankruptcy Plan is then proposed and confirmed only upon the consenting votes of the creditors. The plan will typically extend and/or reduce the debtor’s obligations to creditors.
It is very important to understand that while Chapter 11 Bankruptcy is extremely flexible, the success rate is very low.
Chapter 11 Bankruptcy is lengthy, difficult and requires extensive knowledge and careful oversight.
Due to the low success rate and high attorneys’ fees, Chapter 11 Bankruptcy is usually not an attractive solution to individuals, families or small businesses.
While not available to businesses, consumers typically try to liquidate under Chapter 7 Bankruptcy or reorganize under Chapter 13 Bankruptcy where the process is much more straightforward and the fees much more affordable. The Chapter 13 Bankruptcy process also allows debtors to maintain control of their assets while reducing and extending their obligations to creditors.
If you live in Long Island or Queens, call today to schedule a free, no-obligation, informal consultation either in my office, over the telephone, at your home or at a coffee shop near you. We will discuss your situation in detail and together, come up with a reorganization plan that meets your needs.
*It is important to understand that the above information highlights only some of the procedural aspects to a Chapter 11 Bankruptcy Case. For more information and for a full evaluation of your case, please contact my office to schedule a free consultation.