Ways & How

how to file a Chapter 11 bankruptcy

how to file a Chapter 11 bankruptcy

When the ratio of your debt versus your earnings has become imbalanced with your debt higher than your capacity to earn, bankruptcy can become your option.  There are different kinds of bankruptcy chapters that you can opt to file.  Know how to file a Chapter 11 bankruptcy as this is what you should choose for you to continue operating your business.  Hopefully you can buy time while working hard to make your business prosper.  These are important guidelines to consider:

  1. Get the services of a bankruptcy lawyer.  Choose one who is very competent and has the experience with this kind of bankruptcy option as this is more technical than Chapter 7 or Chapter 13 bankruptcies.  He will have to file all the forms, documents, and fees required after a careful study of your case.

  2. For individuals filing Chapter 11 bankruptcies, you will have to attend credit counseling from an accredited provider prior to the filing of your petition.  Be sure to obtain proof of your attendance, and include it with the attachment of your petition.

    our lawyer’s opinion on which agency to go to.  This is mandatory.

  3. Gather all the information pertaining to your finances and your obligations to your creditors.  Make sure you divulge everything to your chosen lawyer for him to advise you properly on your repayment options.  You will be required to submit a statement of assets and liabilities, income and expenditures, and other financial statements. Unlike other bankruptcy chapters, Chapter 11 allows you to continue with your business, but you have to abide by an approved repayment schedule for your creditors.  Failure for you to comply with this and your attendance at the hearings will disqualify you from filing for bankruptcy for 180 days.

  4. Your creditors will also submit to the court their proposed repayment schedule and will also be required to attend the hearings. So be ready as they will challenge your petition request with regards to your obligations to them.  With the court’s supervision, they will vote whether to accept your repayment plan or stick to theirs.  The court’s decision will be final.

  5. The government in this case is usually one of the creditors as you incur tax obligations in the normal course of operating your business. So be prepared to meet the IRS.  Do not be weary, though, as a repayment schedule can also be arranged for your back taxes the same with your other creditors.

  6. After you have given all the needed information and proper documentation of your Petition for Bankruptcy, relinquish control to your creditors and the court.  Everything is left for them to decide, and matters will be weighed properly. This is a win-win situation for all of the parties involved.  What you seek here is just a repayment schedule for your debts that is more manageable to you as you continue to operate your business.  It is just mandatory that you comply with the final arrangements made.

Chapter 11 bankruptcy is a restructuring type of bankruptcy option ideal for business owners and self-employed individuals. This is the type of bankruptcy suited for you if you want to protect your personal and business assets while only partially repaying your creditors. If you fall under this category, then you should know how to file Chapter 11 bankruptcy with the help of a good bankruptcy lawyer.  It is not possible for you to file it on your own, so you have to be ready with the professional fees that your lawyer will charge you.  After your petition is granted, be motivated to work harder to be able to meet all of your obligations and avoid the same thing happening again in the future.


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