What qualifies you for Chapter 11?
Bankruptcy is designed to help you get back into financial good standing. Chapter 11 bankruptcies were particularly formatted for businesses to help them catch up on their payments. This also allows them to improve their ability to create a return for their creditors. Small and large businesses both can file for this, which provides a solution to their financial obligations.
How to qualify for Chapter 11
When you file for Chapter 11, it can help you stay on top of your payments with a new financial strategy. You receive debt relief without losing your assets.
You must have a certificate of credit counseling
Before you file for bankruptcy, you have to receive credit counseling before you petition for bankruptcy. This is according to the US Bankruptcy Court. The counseling must occur 180 days before you file. Then you must provide the court with the proof in the form of a certificate created by the credit counseling agency. You must obtain one from an agency approved by the US Department of Justice. In some cases, you may be advised to create a payment plan without filing. These agencies provide debtor education to help you make a decision.
You must have a debt repayment plan
When you petition for your bankruptcy, you have to create a debt repayment plan that can be approved by the court. To do this, you can employ the help of a Chapter 11 attorney who can help you draft this repayment plan after reviewing all of your debts and current expenses.
Evidence of payment from employers
You have to show all income from employers. If you are not employed or are self-employed then you have to prove how you can remain financially stable. You may be ineligible if you do not have some form of income to help sustain yourself.
Statement of monthly net income
Your monthly net income must be presented in detail to show the amount of money you make. All of your expenses must be listed, as well as any income. If you have an increase or decrease in any area of your finances, it should be mentioned in your file.
Interest in tuition
If you are going to a school that is nationally accredited and have any loans, you can factor in this debt. Although student loans are not forgivable by way of bankruptcy, you can still mention the interest you pay on these loans in your file.
Have not filed for another bankruptcy chapter
You cannot file for a new chapter if you have recently filed for a previous one. You must wait a period of 180 days before you can file for a new one. This is even if you were disqualified for a previous case.
Pay filing fee
When you file for a Chapter 11 bankruptcy, you must pay a filing fee. Courts must charge a $1,167 filing fee in addition to a $571 fee for miscellaneous administrative processing. If you cannot afford this amount upfront, you can pay it in installments with the debtor’s permission.
Speak with a knowledgeable bankruptcy lawyer
If you are confused about the Chapter 11 bankruptcy requirements or do not understand how to file, you can speak with a dedicated representative. They can guide you on what requirements you need.
https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics#:~:text=This%20chapter%20of%20the%20Bankruptcy,seek%20relief%20in%20chapter%2011