Filing for Chapter 11 Bankruptcy in Brookfield, CT
What is Chapter 11 Bankruptcy?
The Chapter 11 Bankruptcy was created and designed to help large businesses who have accumulated large amounts of debt. Instead of alternative bankruptcy methods that require liquidation, Chapter 11 Bankruptcy allows businesses to hold on to their assets and instead, restructure their business to remove the debt. There is a formal bankruptcy petition that must be approved by a local court, but then applying company may then get the fresh start they are looking for. Some debts may have to be paid off, and some debts will also be forgiven. With Chapter 11 Bankruptcy, we try to keep your Brookfield business growing.
While the Chapter 11 Bankruptcy is designed for larger companies and businesses, smaller companies and individuals are also able to apply for Chapter 11 Bankruptcy to avoid asset liquidation. It is, however, less common for smaller entities.
How Does Chapter 11 Work?
Similar to most bankruptcy processes, the Chapter 11 Bankruptcy begins with a petition and filing. This is sent to a local Brookfield court to either approve or dismiss. If you are declaring the bankruptcy voluntarily, then the debtor is expected to fill out the petition. If the bankruptcy is not voluntary, then the petition can be filled out by the creditor. Information is required at this stage to help the application process goes smoothly and efficiently. This information is usually financially related, 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
The filing process will occasionally require a schedule to cut back on current costs or a list of resources for additional income, which can keep the creditor at bay.
Confirming the Plans for Chapter 11
A Chapter 11 Bankruptcy filing process often includes a list of certain requirements. Before approval, the restructuring must be approved, and it must have requirements such as:
- Feasible: is the proposed plan both plausible and potentially successful? Can the debtor or business accomplish what the plan proposes? Expenses must either be covered or accounted for in the scheduled time.
- Best Interest of the Creditors: the proposed plan must serve the needs of the creditor as well. This financial coverage must meet the needs as if it were a liquidation bankruptcy case.
Once the local Brookfield court has approved your bankruptcy application, you can then begin the reorganization of your company.