Chapter 11 bankruptcy – Things to know
Any legal procedure has complexity attached to it. Understanding the legality of any matter can become complicated for any person who is not a professional in dealing with such cases. Similarly, bankruptcy may sound just like a legal status that can be filed easily but it has its taste of confusion. There are multiple laws to understand and comprehending what laws can help you better in filing for bankruptcy can become a terrifying experience. One such chapter under bankruptcy laws is Chapter 11, and it helps individuals and companies file for bankruptcy under some circumstances. Just let us know about Bankruptcy in Orlando:
What is Chapter 11 in bankruptcy?
In a bankruptcy petition, two categories are considered – the debtor and its creditors. Chapter 11 in bankruptcy defines the debtors, i.e., the company or individual filing for bankruptcy and its creditors, which means the people who have lent any sort of financial help.
What happens to the debts and assets under Chapter 11?
Chapter 11 does not define specifically what happens to the debts after a bankruptcy petition. However, there are certain types of debt such as student loans that need to be paid back. The debtor can choose to re-pay partially or in instalments.
When to file for Chapter 11 bankruptcy?
Chapter 11 bankruptcy is an expensive deal and thus it is not suitable for everyone. For instance, a small business owner can file for bankruptcy if he has to get rid of the debts and focus on running their business. Similarly, if large business owners want to prevent liquidation, they can file for Chapter 11 bankruptcy.
How long does it take to file a Chapter 11 bankruptcy?
Any better individual filing for Chapter 11 bankruptcy has 18 months to present their reorganisation plans. Otherwise, the creditors can step in to suggest a plan for recovering their credits. Moreover, the repayment duration can be in days or even last year.
Every person faces a different type of financial situation, a small business owner will be going through some of their financial trouble, whereas a large business owner might have complications. Since the financial crisis is different, it is not right to judge different financial statuses under one law. This is why there are variations in bankruptcy laws and only a bankruptcy attorney can understand them correctly. That is why it is recommended that you consult an expert in bankruptcy laws before you choose to file a bankruptcy petition. To identify if your financial condition qualifies for a Chapter 11 bankruptcy try talking to a bankruptcy attorney.