If you’re thinking about filing for bankruptcy, one of your options is Chapter 11. This type of bankruptcy is often called reorganization bankruptcy because it doesn’t wipe away your personal debt. Instead, it helps restructure your debt so that you can pay it off. While individuals can file for personal bankruptcy Chapter 11, a number of businesses, especially small businesses, often select this option also.
What Are the Benefits?
If you file for personal bankruptcy Chapter 11, the court will gather all of your debts and create a plan for you that reduces some of your financial obligations so that you can better afford to meet these monthly payments. The court may also modify the terms of some of your debt by reducing your monthly payment or interest rate so that you can get back on your feet financially while still allowing your creditors to recoup some of the money you have borrowed.
When Is Chapter 11 the Right Option?
Chapter 11 bankruptcies are recognized as some of the most complicated bankruptcy cases, which is why some lawyers do not handle them. However, Fred Wehrwein, P.C. does handle these cases and can provide expert guidance in whether or not personal bankruptcy Chapter 11 is the right option for you. If other bankruptcy options cannot provide you with the financial relief you need, Chapter 11 may be the only option. It’s also the only way for some businesses such as partnerships, LLCs, and corporations to file for bankruptcy because they are not allowed to file Chapter 13 bankruptcy.
How it Differs
Chapter 7 bankruptcy can damage your credit, especially if you decide not to reaffirm most of your debts. Chapter 13 requires that you must pay a good portion of your debts within a five-year period. With Chapter 11, however, you have more freedom with your repayments and your credit is generally not as damaged because you’re reorganizing your debt rather than surrendering items or having debt eliminated. You can also follow them on Twitter.
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