Whether you have a business or are an individual, sometimes through certain circumstances, your finances may become unmanageable. Basically, you’re robbing Peter to pay Paul or there just isn’t any money to pay your bills at all. Chapter 11 Bankruptcy can give relieve to:
• Sole Proprietorships
Some individuals that are in over their head will choose Chapter 11 if they can’t use Chapter 13 because of their expenses being too high or their finances are too complex to use it. If you are a sole proprietorship, your business is not separate from your personal assets and all will be involved in a bankruptcy case. If you hold stock in a corporation that is filing Chapter 11 Bankruptcy, your own personal assets are not included in the bankruptcy, but your stock is at risk. If you are in a partnership, you may have to protect your personal assets so they don’t pay the partnership’s debt.
If you file bankruptcy, an automatic stay immediately goes into effect. This stops your creditors from harassing you with collection calls and notices. The courts notify them that you have filed for bankruptcy. During a bankruptcy, you can keep your property while your debits are reorganized. Your possession will remain until:
• Your plan for reorganization is confirmed.
• The case is dismissed.
• A trustee is appointed.
Very rarely will a bankruptcy trustee be appointed with a Chapter 11. If the court feels you have been deceitful, committed fraud or have completely mismanaged your estate, then a trustee will be appointed.
To complete a bankruptcy, using Chapter 11, a debt reorganization plan must be filed. This plan states how you will pay your creditors. The court has to approve your plan. You also must file a disclosure statement on your finances. The court will approve your plan based on:
• Whether it is compliance with bankruptcy laws.
• If you proposed the plan in good faith.
• If the plan is going to success with further reorganization.
If your plan gets confirmed, you will then receive a discharge from debt. This does not mean you get to walk away from debt. A discharge from debt means that your creditors will now get paid through the courts from your money at a payment you can afford. For more information visit Ledfordwu.com.