Port St. Lucie Chapter 11 Bankruptcy Attorney
Chapter 11 bankruptcy is often referred to as a ‘reorganization’ bankruptcy because a borrower’s debts are reorganized into a payment plan. The debtor does not discharge most of their debt but instead, creates a plan that is more affordable for them to pay within a certain amount of time. Chapter 11 bankruptcy is typically used by businesses, but individuals with very high levels of debt also sometimes choose this route. The Chapter 11 process can become quite complicated. Our St. Lucie Chapter 11 bankruptcy attorney outlines the steps involved below.
Filing the Petition
Like all other types of bankruptcy, a Chapter 11 begins when a bankruptcy petition is filed with the appropriate local court. Unlike other types of bankruptcy, it is not always only the debtor that files the petition in Chapter 11 bankruptcies. Certain creditors, if they meet certain conditions, can also file the petition, forcing the business to involuntarily file.
Debtor Assumes Role of Debtor-in-Possession
Also unlike other types of bankruptcy cases, after the petition is filed the borrower assumes the role of debtor-in-possession. This title is held throughout the entire process and allows the borrower to maintain control of their assets. The title is particularly beneficial for business owners, as they can continue to operate the company while they move through the bankruptcy process. Debtors-in-possession have certain responsibilities, such as responding to creditor claims and filing reports with the court.
Assignment of the Bankruptcy Trustee
Just as in other types of bankruptcy cases, a bankruptcy trustee is assigned to a specific case during a Chapter 11. Contrary to other types, the bankruptcy trustee does not take control of the assets. Instead, they only oversee the actions of the debtor-in-possession.
Submitting the Reorganization Plan
Debtors must create a reorganization plan and submit it within 120 days of the petition being filed. Creditors are given the opportunity to review and evaluate the reorganization plan and if they find it is lacking, they can create their own plan and submit it to the court. The bankruptcy court will then review the plan and approve it if they find it suitable.
Discharge of Debts
Not all debt may be included in a Chapter 11 bankruptcy. Some debt may be discharged, which means that the borrower is no longer responsible for repaying. Debt collectors and creditors also cannot try to collect on the debt or take any legal action against the borrower for debt that has been discharged. Once the debt is discharged, the reorganization plan becomes active and borrowers must make all payments as outlined in the plan.
Our Chapter 11 Bankruptcy Attorney in Port St. Lucie Can Help You Through the Process
The Chapter 11 bankruptcy process can be a great relief for businesses and individuals struggling with large amounts of debt. At Kelley, Fulton, Kaplan & Eller, our Port St. Lucie Chapter 11 bankruptcy attorney will guide you throughout every step of the process so you have the best chance of a successful outcome. Call us today at 561-264-6850 or contact us online to schedule a consultation.