Chapter 11 in Louisville

Chapter 11 is business bankruptcy and not frequently used by individuals.  The business or debtor proposes a reorganization plan to repay its creditors over time and try to keep the business alive.  Denise Brown explains Chapter 11 for Louisville businesses.

In order to file for Chapter 11 bankruptcy, the debtor must do the following:

• File a petition with the courts
• Provide a full list of assets
• Provide a full list of liabilities
• Provide a schedule income
• Provide a list of expenditures
• Provide a full list of contracts
• Provide a current financial status of the organization
• File a written proposal for the reorganization of the business

If an individual is filing for Chapter 11 bankruptcy, then he/she will also need to provide:

• A certificate from a Credit Counseling Class
• A debt repayment plan
• Proof of income for himself/herself as well as his/her spouse

As part of the bankruptcy process, the debtor becomes known as the debtor in possession.  He/she will continue to possess and control his/her assets.  In Chapter 11 business bankruptcy, the trustee does not perform the typical duties like other bankruptcy filings.  Instead, he/she monitors the progress of the bankruptcy and ensures the debtor in possession is performing the reorganization duties properly and adheres to the agreements made as part of the bankruptcy process.

Though a case trustee is rare in Chapter 11 bankruptcies, there may be instances in which one is assigned to the case.  These instances include:

• Fraud
• Incompetence
• Gross mismanagement
• Dishonesty
• At the request of the monitoring trustee or another interested party

Another difference with Chapter 11 business bankruptcies is the automatic stay.  During this period, all judgments, collections, repossessions, foreclosures, etc. are suspended.  The creditors are not allowed to make any claims against the debtor during this time.  This allows negotiations to take place so the financial issues of the debtor may be resolved.

Regardless of the size of the business, Chapter 11 bankruptcies can be extremely complicated.  It is very important to have an experienced bankruptcy attorney to help.  Call Louisville bankruptcy attorneys of Denise Brown's Legal Direction for more information at 502-587-0331, or complete our quick contact web form.