Chapter 11 Bankruptcy Los Angeles
Chapter 11 bankruptcy involves a restructuring of a borrower’s business affairs, debts, and assets, and for that purpose it is recognized as the “reorganization” bankruptcy. Titled after the U.S. bankruptcy code 11, corporations usually file Chapter 11 if they need time to revamp their debts.
A Chapter 11 Bankruptcy Los Angeles is designed primarily for businesses, but individuals can (and sometimes need to) file under this designation.
A Chapter 11 bankruptcy is very involved and can be very expensive, but offers a lot of flexibility and options.
Similar to Chapter 13, with Chapter 11 you have to propose a repayment plan based on your income and other variables, but unlike in a Chapter 13 bankruptcy, your creditors get to vote for or against your Repayment Plan.
A Chapter 11 may be necessary for individuals who do not meet the strict debt limits for a Chapter 13. These are currently at $394,725 for noncontingent, liquidated unsecured debts, and $1,184,200 for noncontingent, liquidated secured debts.
Who is eligible to file a plan
The borrower (unless a”small business debtor”) comes with a 120-day period throughout which it’s a unique right to submit a strategy. 1 1 U.S.C. § 11 21 (b).
This exclusivity period could be reduced or extended by the courtroom. However, the exclusivity period, including all extensions, cannot be more than 18 months. 1 1 U.S.C. § 11-21 (d). The U.S. trustee can not file a plan. 1 1 U.S.C. § 307.
A chapter 11 case may continue for quite some time before the courtroom, the U.S. trustee, the committee, or another party in interest acts to ensure the case’s timely resolution.
The creditors’ right to file a competing plan offers incentive for the borrower to submit a plan over the exclusivity period and acts as a check on excessive delay in the situation
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