Understanding Chapter 11 Bankruptcy in St. Louis
Filing for Chapter 11 bankruptcy in St. Louis may be a viable and responsible decision to help you discharge your debts in a structured and organized manner, and rebuild your financial foundation as quickly and effectively as possible.
However, because filing for Chapter 11 bankruptcy protection is relatively less common than other types (such as filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy), many businesses and individuals do not have the clear, basic understanding they need to seriously consider this option.
To solve this, the Law Office of Charles H. Huber is pleased to provide this simple and accessible overview:
Eligibility to File for Chapter 11 Bankruptcy in St. LouisContrary to what some people believe, it is not just businesses that can file for Chapter 11 bankruptcy in St. Louis — individual debtors may file as well. However, this generally happens only when individuals have debt that is higher than the limits imposed by Chapter 13 bankruptcy, which is $360,475 in unsecured debt, and $1,081,400 in secured debt.
Once an individual or (more commonly) a business files for Chapter 11 bankruptcy in St. Louis, a debtor also becomes what is known as the “debtor-in-possession.” This designation enables a debtor to have the rights and responsibilities of a bankruptcy trustee. For example, a debtor can file lawsuits, obtain loans, and negotiate contracts.
Some of these responsibilities can only be discharged with the court’s approval, and unlike bankruptcy trustees, debtors-in-possession cannot be compensated for their efforts. Furthermore, the court or any creditor can seek to have the debtor-in-possession replaced by an official bankruptcy trustee if they believe it is in the best interest of the estate and creditors.
Upon filing for Chapter 11 bankruptcy in St. Louis, a debtor must also create a Disclosure Statement and submit it to the court for approval. This document must clearly and comprehensively describe how a debtor will use the protections granted under the Chapter 11 filing in order to organize and discharge debts. Debtors whose Disclosure Statement is not accepted will not be allowed to move ahead in the process.
If and when the Disclosure Statement is approved, a debtor must also create a plan that clearly shows all classes of impaired creditors (i.e. creditors who will get less than they are owed) how much they will be paid back and when. If applicable, the plan must also describe how a debtor – again, typically a business in this context – will operate during the process, which can often last for several months or years. The plan must then be voted on and approved by creditors, and then subsequently approved by the court in order for the Chapter 11 bankruptcy in St. Louis to proceed further.
Carrying Out the Plan
Provided that the above-noted plan is approved by creditors and the court, the next step is for various action items to be executed. While each plan is different and unique to each debt situation, the action items typically include appointing a third-party plan agent. This agent is responsible for making scheduled payments on behalf of a debtor.
Importantly, the above-noted plan also states when a debtor is expected to be discharged from Chapter 11 Bankruptcy in St. Louis. Based on the amount of debt, the number of creditors, and the specific nature of the bankruptcy situation, discharge may be scheduled months or years in the future.
Learn More About Chapter 11 Bankruptcy in St. Louis
If you are an individual or a business who is considering filing for Chapter 11 bankruptcy in St. Louis then give the Law Office of Charles H. Huber a call today. We have over 30 years of experience in bankruptcy, and will provide you with specific advice and guidance based on your unique situation.
Remember, regardless of what creditors or others may tell you: it is your legal right to file for Chapter 11 bankruptcy in St. Louis!