Chapter 11 bankruptcies have been in the news lately with the bankruptcy of Chrysler and the possible bankruptcy of GM. Many debtors may be wondering how Chapter 11 bankruptcy could work for them. Well, most individuals and small business debtors will benefit the most fromChapter 7 or Chapter 13 bankruptcy ; but for some debtors Chapter 11 bankruptcy is either required or preferable.
Corporations and partnerships seeking bankruptcy protection must file Chapter 11 bankruptcy. Debtors who exceed the debt limits of Chapter 13 bankruptcy would also need to file Chapter 11 bankruptcy. To find out the current debt limits contact a qualified bankruptcy attorney because these debt limits sometimes change.
Chapter 11 bankruptcy is similar to Chapter 13 bankruptcy in that it allows the debtor to restructure and repay their debt through installments over a period of time. However, there are some critical differences between these types of bankruptcy. While a Chapter 13 bankruptcy plan allows the debtor to repay their debts over a period of 36 – 60 months, Chapter 11 bankruptcy has no time limit.
Also, Chapter 13 bankruptcy plans must be paid on a monthly basis while there is no such requirement in Chapter 11 bankruptcy. A debtor in Chapter 11 bankruptcy could theoretically make payments twice a year. And that’s just the beginning of the differences.
To find out if a Chapter 11 bankruptcy would be appropriate for your case contact a Dallas-Fort Worth bankruptcy attorney.