There are many types of bankruptcy, including chapter 7, chapter 11, and chapter 7. Each type of bankruptcy has its own unique purposes and risks. Chapter 7 allows a business entity, for example, to liquidate its assets under the supervision and control of a bankruptcy court. Chapter 11 bankruptcy is used for businesses to restructure their debts. Chapter 12 is for family farms and local government agencies. Chapter 15 also recognizes foreign bankruptcy proceedings in the United States.
Chapter 7 bankruptcy
Chapter 7 bankruptcy is an option if you are unable to pay your bills. This process will take between four and six months to complete. It costs approximately $299 in filing fees, and administrative fees. You will usually only have to make one visit to the courthouse. During this time, you should collect financial records. You will also need schedules and a statement about your financial affairs.
Filing for Chapter 7 bankruptcy requires several forms to be completed and filed with the court. Those forms will provide the court with a detailed picture of the debtor’s finances, assets, and debts. In addition, the court will appoint a bankruptcy trustee who will examine the debtor’s financial transactions and look for nonexempt property and assets to distribute. The trustee will also need to fulfill the promises made by secured debtors.
Although most unsecured debts can be discharged in Chapter 7, certain types of debts cannot. Certain personal injury claims and tax debts against the debtor cannot be discharged. The court can still discharge certain debts that are secured by collateral or a lien on real property. If the debtor has committed misconduct, the court might object to a discharge.
Although Chapter 7 bankruptcy can provide relief for people with serious debts, it can also have its drawbacks. It can have a lasting negative impact on one’s credit score. In addition, it can cause the loss of nonexempt assets, like jewelry, and can result in the loss of a home or car.
Whether you need to file Chapter 7 or another type of bankruptcy, you should seek the advice of a bankruptcy lawyer. If you decide to file Chapter 7, the court will determine your eligibility for it based on a means test instituted in 2005. You must also be able to show that your income is sufficient to meet the requirements.
The process of filing for Chapter 7 bankruptcy is typically four to six months long. It can take longer if additional documents are required by the trustee or if you have to sell your property in order to repay creditors. It can also take longer if there are any student loans involved. In addition, the bankruptcy process can be complicated and require a lengthy trial.
To be eligible for Chapter 7, you must pass the federal means test. This means test is a calculation of your income and expenses. You must have enough income to make at least 20% of your debts over five years. You must also be able to pay the trustee’s fees. If you do not meet these requirements, you should file Chapter 13 bankruptcy.
Chapter 11 bankruptcy
Chapter 11 bankruptcy allows a company to sell its assets without any liens, encumbrances, or other interests. This can attract more interested buyers and result in a higher sale price. The bankruptcy court is a valuable protection for buyers. In some instances, a bankruptcy court may even grant debtors in possession the ability to sell or lease their assets.
The process for filing a Chapter 11 bankruptcy case is the same as for filing under Chapter 13. A debtor must file a bankruptcy court document listing all of their assets, creditors, and business assets. The debtor must also list their financial situation and any assets that might be sold. Unlike in Chapter 13, debtors can continue to operate a business after filing under this process, provided they meet the requirements of the bankruptcy court.
Creditors cannot bring any action against the debtor while the Chapter 11 bankruptcy case remains pending. This protection extends to any debt incurred prior to the filing of the bankruptcy petition. If a debtor fails to abide by this automatic stay, he or she can be fined.
The United States Trustee must receive the operating and financial reports of the debtor during bankruptcy proceedings. This trustee is different from the trustee appointed by the bankruptcy court. The United States Trustee can appoint a trustee, if ordered by the court.
Creditors can vote on the plan once the bankruptcy court approves it. Mail ballots are sent to creditors who are eligible for the vote. The ballots include a summary of what the plan is and a disclosure statement. The court will then set a deadline for the public to vote on the plan.
Chapter 11 bankruptcy provides a way for struggling businesses to reorganize their finances to maximize the return to creditors and owners. To get rid of personal guarantees, some business owners to file personal bankruptcy. By eliminating personal debt, these business owners can keep their businesses open and continue to operate after the bankruptcy. It is important to remember that bankruptcy filings also stop most creditors from collecting.
While a debtor has the exclusive right to propose a Chapter 11 plan, other creditors may also file a competing plan. Typically, competing plans include liquidation of assets or a sale of the business. This makes bankruptcy more costly. In Chapter 11, there are strict rules regarding the use of cash collateral. If creditors don’t approve of the plan, they may seek to have the bankruptcy case dismissed.
A professional is the best person to help you find the right bankruptcy solution. These professionals can help you decide if Chapter 11 is the right option for you. They will provide guidance on filing and make sure the bankruptcy is completed successfully.
Chapter 12 bankruptcy
Chapter 12 bankruptcy is for people with large debts. Within 90 days of filing bankruptcy, the debtor must submit a repayment plan. The bankruptcy court must approve the plan or it will be rejected. The repayment plan must include a payment equal to 100% of all secured creditors. It can also include a payment of part of the debt owed to unsecured creditors.
The court will determine the amount the debtor must repay creditors in a Chapter 12 bankruptcy. This amount is known as the allowed claim. However, the court cannot force the creditors to make any new loans. In some cases, a bankruptcy judge may allow a debtor to use their existing assets and cash as collateral.
A chapter 12 bankruptcy can benefit both business entities and people. Farming or fishing operation can file for this type of bankruptcy, if 50% of its debt is non-mortgage debt. A commercial fishing operation must have a total debt of $1,757,475 or less. A business entity that filing under chapter 12 bankruptcy can be owned only by one family or a small number of people. The business must be run by the same family.
A plan that extends the maturity dates of the debtor’s loans, changes the monthly payments, or alters amortization schedules can be approved by the court. The court can approve this over the objections of the creditors affected. A debtor in a chapter 12 bankruptcy can still issue payroll checks on a regular basis. The court will need to approve the payroll.
After the debtor files the petition, the bankruptcy trustee will hold a “meeting of creditors” within 21-35 days. During this meeting, the debtor is put under oath and creditors may ask questions. The meeting will be adjourned to a confirmation hearing. The trustee will then file the plan after the creditors approve it.
Most collection actions will be stopped by filing for a chapter 12 bankruptcy petition. It will not stop all types of collection actions, however. The 11 U.S.C. lists the actions. SS 362(b). The automatic stay also protects co-debtors from creditors’ collection efforts.
A chapter 12 plan is typically a three-page document, which specifies how the debtor will deal with creditors. Every debtor involved in the case must sign this document. The plan must be filed within 90 days of the filing of the bankruptcy petition. It is crucial to understand what your bankruptcy trustee is looking for when approving a plan.
Once the plan is approved by the bankruptcy court, the trustee will distribute the funds to the creditors in the quickest possible time. The debtor can file a revised plan if the bankruptcy court rejects the plan. The bankruptcy court may reject the revised plan and the debtor can convert the case into a liquidation case.