Understanding Chapter 11 Bankruptcy
In today’s volatile economy, many business owners, small and large, find themselves overburdened by financial difficulties. Under federal law, a person — typically a business or partnership — may attempt to suspend their credit obligations by filing a claim under Chapter 11 of the United States Bankruptcy Code. Usually, a person who files for debt relief in New York under Chapter 11 retains control of their assets and possessions while their enterprise undergoes restructuring. During this time, any litigation that has been brought against the business owner, who under Chapter 11 is referred to as the debtor in possession, receives an automatic stay — or, in other words, is placed on hold until the claim has been resolved. A debtor in Chapter 11 may continue to operate its business while the court proceedings are pending.
A Chapter 11 bankruptcy in New York is also available as a option for individuals who owe too much money under the Bankruptcy Code to qualify for Chapter 13 bankruptcy. A New York Chapter 11 bankruptcy attorney is necessary to navigate the often-confusing maze of filing a bankruptcy petition.
One example would be a homeowner with multiple properties and a sizeable amount of mortgages. However, United States Code sets forth limits for individuals seeking to file under Chapter 13. To file under Chapter 13 bankruptcy, a debtor must have unsecured debts of less than $360,475.00 and secured debts of less than $1,081,400.00. One must be able to afford the Chapter 13 payment plan going forward.
A Chapter 11 bankruptcy is also expensive to start. In addition to the cost of hiring chapter 11 bankruptcy lawyers, a filing fee of $1,000.00, and a miscellaneous administrative fee of $39.00 is charged by the Bankruptcy Court for each Chapter 11 case. These fees must be paid to the court’s clerk, unless the court permits the debtor to pay the filing fee in installments of no more than four payments.
Chapter 11 Bankruptcy Lawyers
If you are considering filing a Chapter 11 bankruptcy in NY and are looking to come up with a viable plan for readjusting your debt obligations, then you may wish to seek legal counsel. Please contact our office by phone at 888-529-9600 to arrange for a free, initial consultation with a Chapter 11 bankruptcy attorney.
Remember, “bankruptcy is not the end, it’s a new beginning.”