Chapter 11 Bankruptcy - What Does it Mean and Who Can File It
When you file a petition for bankruptcy you also file with the courts a disclosure statement. This is a document that you list your debts and assets. You must make a list of all your liabilities and all your assets so the court has them on record. Then a reorganization plan is filed with the court.
Chapter 11 is usually used to reorganize a business. A corporation exists separate and apart from its owners and the stockholders. A sole proprietorship is a business that has a single owner as the debtor and therefore the bankruptcy case includes both the owners personal and business assets.
How To File Chapter 7 Bankruptcy
The courts appoint a trustee to oversee the bankruptcy is handled properly. The U.S. trustee supervises and monitors all steps of the proceedings including but not limited to the sale of the debtors assets. The trustee also plans and monitors disclosure statements filed with the court and creditors' committees. The trustee also coordinates and facilitates a meeting with the creditors. The trustee will require the debtor to report its monthly income and operating expenses.He or she also lets the debtor know all new bank accounts must be reported.
If the company has stock and it is publicly traded, it too may be affected. Stocks become delisted and will be noted on the stock exchange with a "q" after its name when it is in bankruptcy proceedings. Usually a good portion of stocks that are delisted become players in the counter stocks.They usually are rendered worthless when the disposition of the bankruptcy happens so people want to rid themselfs of these potentially worthless stocks when they can still get something for them.
An individual is also able to file a chapter 11 Bankruptcy petition. However, the steps and proceedures in a chapter 11 are so complex that people often opt for either Chapter 7 or Chapter 13 if they qualify.
Individuals may also file for Chapter 11 bankruptcy, but due to the complexity of the proceeding-, this option is rarely chosen by debtors who are eligible for Chapter 7 or Chapter 13 relief.
Chapter 11 Bankruptcy - What Does it Mean and Who Can File It