Chapter 11 bankruptcy is for reorganization for business or an individual’s assets and liabilities. Before any person files for chapter 11 bankruptcy, they should take a moment to make sure they fully understand what a chapter 11 bankruptcy involves. This will help a person to not only understand if this is the thing to do, but it can also help the business owners or executives get the most out of their chapter 11 bankruptcy filing. This is a good exercise to do before any individual or business hires a lawyer to file a Chapter 11 in Reading PA.
As mentioned, a chapter 11 bankruptcy is often referred to as a reorganization bankruptcy. It allows for the continuing operations of the business or individual while the assets and liabilities are reorganized to provide something that is more manageable. Now most people think that chapter 11 bankruptcy is just for businesses. It is actually eligible for individuals as well, which a lawyer for Chapter 11 in Reading PA can help to determine if this is an option or not.
Eligibility for Chapter 11
Now any business, whether they be a sole proprietorship business, partner, limited liability partnership, or a corporation can file for chapter 11 bankruptcy. This also means that any size business can also file for chapter 11 bankruptcy. For individuals, there are some restrictions that are set before a person can file for chapter 11 bankruptcy.
For the most part the requirements for an individual to file for chapter 11 bankruptcy hinges around the total amount of debt that a person has. This can vary slightly from state to state, so it is always good to check up on the latest bankruptcy laws. Of course, a bankruptcy attorney can certainly help to advise hat the requirements are and if a person indeed qualifies for chapter 11 bankruptcy or not.
Filing for Chapter 11 Bankruptcy
After determining eligibility, a business or individual will then need to file for chapter 11 bankruptcy. During this process, a business or individual will have to get approval for their disclosure statement. All this basically is a letter that describes everything about the business or personal finance and how the business or individual plans to use reorganization to pay off all of the debts. This can include suggestions on how exactly the debts will be paid off such as payment plans.
Once a disclosure statement is filed the debt holders then have the opportunity to vote on whether or not they will accept the terms proposed. For the most part, most of the debt holders will accept the proposals so long as they are within reason. They would always prefer to be paid in full if possible.
Mitchell A. Sommers ESQ, P.C. is a lawyer for chapter 11 in Reading, PA that offers legal services in Lancaster, Ephrata, and the surrounding regions in Pennsylvania. The legal services offered include bankruptcy law for both businesses and individuals as well as family law, criminal law, real estate law, estate law and wills.
