Filing for Chapter 11 Bankruptcy in Redding, CT
What is Chapter 11 Bankruptcy?
When filing for a Chapter 11 Bankruptcy, it is with the intention of Redding clients reorganizing and structuring their business. Chapter 11 Bankruptcy was designed for large companies with debt by helping them rearrange their operations to pay off parts of the debt. It requires a formal petition and approval from a local court, but then Redding companies can then begin their fresh start.
While it is uncommon for smaller businesses and individuals to apply for a Chapter 11 Bankruptcy petition, it is also an option. You can consult directly with one of our Romanello Law Firm attorneys for feedback and suggestions. Call today to receive a free consultation.
How Does Chapter 11 Work?
In congruence with other bankruptcy applications, a Chapter 11 Bankruptcy begins with an official petition. This is typically sent to the nearest Redding bankruptcy court to be reviewed. Petitions can be either voluntary or involuntary. If the former, the debtor can fill out the petition. If it is the latter, the creditor has the option to fill it out. When filing for a Chapter 11 Bankruptcy, a Redding client is expected to include a disclosure statement. This contains necessary information connected to the financial situation. Information such as:
- History of the debtor
- A Collection of assets and liabilities
- Documentation of current income and expenditures
- A list of any executory contracts or unexpired leases
- A statement of all current financial affairs
In addition to the Chapter 11 Bankruptcy petition, the debtor must propose an adequate plan for restructuring and payment methods. While making these plans and adjustments, creditors can be withheld.
Confirming the Plans for Chapter 11
As with other bankruptcy petitions, a Chapter 11 Bankruptcy is dependent on the approval and acceptance of the plan by the local Redding court. The plan will require several elements, and some of these may include aspects like:
- Feasible: is the proposed plan feasible? Does it make sense and it is plausible for the debtor to make the payments and stay on the suggested schedule?
- Best Interest of the Creditors: does the plan meet the needs of the creditor? The proposed plan must cover necessary payments, including adequate coverage as if it were a Chapter 7 filing.
A dismissal of the debt will be given once the Chapter 11 Bankruptcy plan is accepted by the Redding court and the creditor. The debtor is then able to restructure finances for both the business and personal matters.