Chapter 11 Bankruptcy
Chapter 11 Bankruptcy Brooklyn Attorney at Law
Chapter 11 Bankruptcy cases begin by filing a petition with the court that serves the area where the debtor lives. It can be a voluntary petition, which is filed by the debtor, or an involuntary petition, which is filed by the creditors when certain requirements are met. Unless stated otherwise by the court, the petition needs to include a schedule of assets and liabilities, schedule of current income and expenses, statement of financial affairs and a schedule of unexpired leases or executory contracts.
If the debtor is an individual, additional filing requirements need to be met. Debtors are required to file a certificate of credit counseling, evidence of payment from employers, copy of debt repayment plans from the credit counseling agency, statements of monthly net income with any anticipated increases in expenses or income from employers and a record of interest that the debtor has in any state or federal tuition or education accounts.
Courts are required to charge a case filing fee of $1,000 and an administrative fee of $46. Fees are due before the filing of the case, but the court can approve a payment plan if deemed necessary. You are allowed four payments, but the last payment must be paid before 120 days from the date of filing. If there are extenuating circumstances, the court can extend the time to 180 days. When filing a joint petition, you only need to pay one set of fees. Failure to pay the fines in a timely fashion can result in the case being dismissed.
In a voluntary petition, the debtor’s name, social security number or EIN, location of assets, residence, debtor’s plan and the request for relief under the bankruptcy code all need to be included. When an involuntary relief is filed under Chapter 11 Bankruptcy code, the debtor automatically becomes a debtor in possession. The term is used for a debtor who keeps possession and control for all of their assets while going through a reorganization under Chapter 11 Bankruptcy without a trustee in place.
The debtor gets to retain possession of the assets until such time as the plan for reorganization is confirmed, or the case is converted to a Chapter 7 Bankruptcy, dismissed or a trustee has been appointed. Trustees are only appointed in a small amount of cases. Most of the time, the debtor performs all of the functions that the trustee would normally perform for the case.