Chapter 11 The Reorganization Bankruptcy - 1653 Words

Chapter 11 is referred to as the reorganization bankruptcy. A debtor that files Chapter 11 may obtain approval from the court to continue operation of their business (UScourts.gov). In this chapter, the value on a secured debt, such as equipment loans, mortgage loans, or car loans can be adjusted to the market value. The unsecured debt owed to creditors can also be reduced. This chapter requires payments to your creditors. The payment plan usually lasts for five years. However, the court may require that the payment plan be extended past the five-year mark for business owners and corporations. Eligibility: Examining Qualifications Under Each Chapter After a business owner determines which chapter is suitable for their situation, they†¦show more content†¦No. of Household Member(s) Maximum Income 1 $ 47,798.00 2 $ 62,009.00 3 $ 66,618.00 4 $ 75,111.00 5 $ 83,211.00 6 $ 91,311.00 7 $ 99,411.00 8 $ 107,511.00 9 $ 115,611.00 10 $ 123,711.00 Another factor that the debtor should consider is if they have filed a bankruptcy within the past eight years and received a discharge, they will not be eligible for another discharge in the current Chapter 7 bankruptcy. Individuals and business owners may file Chapter 13 relief as long as the unsecured debts, such as medical and credit card debts, are less than $383,175.00, and secured debts are less than $1,149,525.00 (UScourts.gov). The debtor must receive monthly income since this chapter requires repayment to the creditors. Businesses involved in partnerships, limited liability companies, or corporations cannot file Chapter 13. Chapter 11 is generally used by businesses, partnerships, limited liability companies, and corporations; however, individual debtors who do not qualify for Chapter 13 because their debt exceeds the debt limit, may also file Chapter 11. The Process After Filing