Sacramento Bankruptcy Attorney Discusses Chapter 11 Bankruptcy
Sacramento Bankruptcy Attorney Discusses Chapter 11 Bankruptcy
There are many people out there who are unable to file for a Chapter 7 or a Chapter 13 bankruptcy because they own a business or corporation. Most of these people will look to a Chapter 11 in order to cope with their debts. A Chapter 11 bankruptcy is a reorganization procedure used by businesses, including sole proprietors, partnerships, and corporations. The debtor in Chapter 11 files a petition which includes a list of assets and liabilities, and a detailed statement of financial affairs. The debtor will typically act as his own trustee, called a "debtor in possession", and will remain in possession of all estate property. The court can appoint a trustee for cause shown, including mismanagement.
About one month after the filing, the debtor and his attorney attend a meeting of creditors. The debtor files monthly operating reports, showing income and disbursements, profit and loss, and a balance sheet, and pays quarterly fees to the U.S. Trustee based on the amount of money disbursed. The debtor has the exclusive right to file a plan during the first 4 months. Thereafter, creditors are permitted to file plans. The Chapter 11 plan is accompanied by a disclosure statement, which describes the debtor’s financial circumstances.
The plan places creditors holding similar types of claims into the same class. Creditors whose claims are impaired are allowed to vote on the plan. There usually needs to be a majority vote by the creditors in order for the plan to be accepted by the Court.
If you have a question regarding different debts or filing bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.
