When creditors are calling every day, initiating lawsuits against you, or threatening to take assets, it is time to do something. If no other option is available, bankruptcy is a way to put an end to harassment by creditors, get you on your feet again, and make a fresh start.

You might believe bankruptcy protection is not available to you if you have a high income, or you may be afraid you will have to give up your home or other important assets. These are misconceptions—you may be able to take advantage of a form of bankruptcy protection that allows you to safeguard many of your assets while paying down your debt over time.

If debt is interfering with your sense of security or wellbeing, our experienced bankruptcy attorneys are available to advise on your next steps. Contact a Freehold Chapter 11 bankruptcy lawyer to investigate your options.

Chapter 11 Offers Personal Bankruptcy Protection

Large corporations often use Chapter 11 bankruptcy protection to allow them to continue operating while they restructure their operations and debt. That leads some people to believe Chapter 11 is open only to businesses, but individuals and married couples can file for Chapter 11 in certain situations.

Chapter 11 is the most expensive form of bankruptcy protection, and it can be complicated. Individuals and couples who qualify are usually better off filing under a Chapter 7 or Chapter 13 bankruptcy. However, Chapter 7 requires a means test and higher income people will not qualify. Chapter 13 is only open to people with less than $2,750,000 in debt.

A member of our team can evaluate your financial situation and advise on the form of bankruptcy protection right for you. If filing under a Chapter 11 bankruptcy is advisable, a Freehold-based lawyer will help you prepare the application and guide you through the steps of resolving your financial problems.

The Chapter 11 Process

Chapter 11 bankruptcy proceedings move more slowly than other forms of bankruptcy protection, but like all forms, it provides immediate relief from creditors’ collection efforts. They cannot contact you directly after you have filed your petition for protection, and any legal action they have taken must cease.

An individual or couple seeking a Chapter 11 bankruptcy protection must work with an approved credit counselor in the 180 days prior to filing. When a married couple plans to file bankruptcy together, both spouses must participate in credit counseling.

Financial Disclosure

According to 11 United States Code § 521, your petition for bankruptcy protection must include an exhaustive list of all your assets, liabilities, and sources of income. The disclosure form requires extensive supporting documentation. A Freehold attorney can help you compile the necessary documents and ensure your Chapter 11 disclosure is accurate and complete.

Plan of Reorganization

You must file a proposed plan of reorganization within 120 days of your petition. The plan includes a detailed budget showing how you will reorganize your financial life to pay down your debt. An individual’s or couple’s plan of reorganization must be complete within five years.

Creditors are divided into secured creditors, priority unsecured creditors, and unsecured creditors. The plan must include a proposal for distributing funds among the classes of creditors, and it must treat each creditor in each class the same way—you cannot favor one secured creditor over another, for example.

A creditor can propose a different plan if they do not agree with the one you submitted. A creditor’s plan might require you to liquidate assets you otherwise want to keep. An attorney can negotiate with the creditors to create a satisfactory plan which allows you to retain the most important assets, such as your family home.

Plan Confirmation

The court must accept the plan of reorganization, which is referred to as confirming the plan. The court will confirm the plan when half the creditors in each class, representing two-thirds of the dollar value of the claims of each class, vote in favor of it.

Emerging From Chapter 11 Bankruptcy

Once the creditors have approved a plan of reorganization, you must make payments in accordance with it. If you fail to meet your obligations, you may be forced to repay the entire amount of your debt.

When you have fulfilled your obligations, your remaining unsecured debt is discharged, meaning you begin with a clean slate. Taxes, spousal and child support, student loans, and damages owed due to a personal injury lawsuit are not dischargeable in bankruptcy. Similarly, if you retain the collateral for a secured debt—such as a home subject to a mortgage—you are still obligated to pay the mortgage after emerging from Chapter 11 bankruptcy protection in Freehold.

Contact a Freehold Attorney to Learn if Filing for a Chapter 11 Individual Bankruptcy is Right for You

Bankruptcy is a step that requires a thorough understanding of the process and implications. A Freehold Chapter 11 bankruptcy lawyer can explain how filing for bankruptcy protection might impact you and your family, and how it could help you move forward with greater financial stability.

Call today to speak with a team member from Gillman, Bruton & Capone during a free case evaluation.