Chapter 11: Small Business And Corporate Bankruptcy Information
Bankruptcy chapter 11 is often used by small business owners and corporations wanting to repay debts through a bankruptcy repayment plan. Chapter 11 is also an option for individuals with excessive debt and family farmers that do not qualify for chapter 12; a chapter of bankruptcy reserved for farmers and fishermen.
In order to obtain protection under Chapter 11, debtors must meet the minimum debt load requirements. Individuals and corporate entities are required to have at least 6,900 in unsecured debt and no more than ,010,650 in secured debts.
Debtors must attend a 341 creditor meeting and submit a proposed payment plan for creditor review. The 341 meeting occurs within 30 to 90 days after petitioning the bankruptcy court. The Creditor’s Committee is appointed by the U.S. Trustee and is generally comprised of seven creditors that hold the most unsecured debts owed by the petitioner.
Business operations are allowed to continue during the chapter 11 debt restructure phase. This period is referred to as ‘debtor in possession’ and provides debtors the right to act as a bankruptcy trustee. This status allows debtors to sell or trade business assets without obtaining court permission.
