Chapter 11 bankruptcy is available to individuals and businesses. It can protect you from collections and lawsuits while giving you a chance to repay your debts and repair your finances. The process is known as restructuring.
The reorganization plan is an essential part of Chapter 11 bankruptcy. You must file a petition requesting this protection. Then, you must submit a plan showing what you will do to restructure your finances and repay the debt. Your primary creditors must approve the plan. By accepting the reorganization, your creditors agree to wait for repayment. The idea is that your income will increase after restructuring. This means that if the creditors wait, they could recover more than they would have through liquidation.
Because Chapter 11 bankruptcy is costly and highly involved, it is mostly used by corporations. It is also available to individuals whose debt exceeds certain limits.
Here are a few benefits of Chapter 11 bankruptcy:
Increased competition, economic shifts and disputes with suppliers can put a company at risk for insolvency. Chapter 11 cases are in the headlines regularly because restructuring is often the best way for companies to stay in business while paying off debt. For example, a number of retail chains have restructured their businesses by closing unprofitable stores, laying off workers and trimming expenses.
Individuals often request Chapter 11 protection when their income or debt exceeds the limits offered by Chapter 7 or 13. This type of bankruptcy is available if you have more than $394,725 in unsecured debt or more than $1,184,200 in secured debt. These limits are adjusted periodically. It’s also useful for lowering the interest rate and extending the mortgage term on financed real estate so that properties can become profitable.
If you’re considering Chapter 11 bankruptcy, I will work with you to determine the best course of action based on your income, assets and debts. My goal is to help you through the process and to make sure that you are treated fairly. I work with clients in Oklahoma City, Norman, Edmond and the surrounding area. Call Mitchell & Hammond at 405-216-0007 to schedule a free consultation
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