why did my lawyer file chapter 11 bankruptcy

Here are a few reasons why: Chapter 11 has a more expensive filing fee. Unlike Chapter 13, Chapter 11 does not have an automatic stay for co-debtors. Unlike Chapter 13, Chapter 11 does not contain a statutory authorization for separate classification of debts for which the debtor is co-liable.

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How does Chapter 11 bankruptcy affect InfoWars lawsuits?

May 23, 2014 · Here are a few reasons why: Chapter 11 has a more expensive filing fee. Unlike Chapter 13, Chapter 11 does not have an automatic stay for co-debtors. Unlike Chapter 13, Chapter 11 does not contain a statutory authorization for separate classification of debts for which the debtor is co-liable. Chapter 11 debtor must get court approval to retain counsel, who …

Do I need to file a claim in Chapter 11 bankruptcy?

Why File Chapter 11 Bankruptcy With Us Our team of 30+ experienced Attorneys and legal professionals are committed to providing our clients with hope and guidance when facing debt challenges. We do this with compassion and understanding, believing that our clients’ needs in a specific case are unique to their situation and can be managed through legal alternatives up to …

How does Chapter 11 bankruptcy work for small businesses?

18 hours ago · Infowars filed for voluntary Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas in the face of multiple defamation lawsuits. Infowars founder Alex ...

What happens to unpaid debts in Chapter 11 bankruptcy?

17 hours ago · In its court filing, Infowars said it had estimated assets of $50,000 or less and estimated liabilities of $1 million to $10 million. Creditors listed in …

Why would an individual file Chapter 11?

Chapter 11 cases are seldom filed by individuals. However, when individuals do file for Chapter 11, it's usually for one of two reasons: real estate investment reorganization or reorganizing unsecured debts that are too high to qualify for Chapter 13 relief.

Why did I get a Chapter 11 bankruptcy notice?

A Notice of Bankruptcy informs you that you or your company may be owed money by a company that just filed bankruptcy (a debtor). Since you've been given notice, you're now expected to comply with the deadlines and restrictions imposed in bankruptcy.Oct 3, 2016

What does Chapter 11 bankruptcy provide for?

This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.

Who files for Chapter 11 bankruptcy?

Creditors. Either the business owner in debt or its creditors can file for Chapter 11 bankruptcy. If the creditors decide to file, it is called an "involuntary petition." No matter which party files the petition, the business is the one that goes through the bankruptcy process.Jun 30, 2021

Who gets paid first in Chapter 11?

Secured creditorsSecured creditors, like banks, typically get paid first in a Chapter 11 bankruptcy, followed by unsecured creditors, like bondholders and suppliers of goods and services. Stockholders are typically last in line to get paid. Not all creditors get repaid in full under a Chapter 11 bankruptcy.Jul 9, 2016

Does Chapter 11 wipe out debt?

Chapter 11 and Chapter 13 bankruptcies allow for the discharging of debts but have different costs, eligibility, and time to completion. Chapter 11 can be done by almost any individual or business, with no specific debt-level limits and no required income.

What happens after a Chapter 11 plan is confirmed?

After a Chapter 11 plan is confirmed by the court, the plan must be implemented and carried out, either by the debtor or by the successor to the debtor under the plan. If the plan calls for the debtor to be reorganized or for a new corporation to be formed, this function must be carried out first.

What are three things that lead to bankruptcy?

The common causes of bankruptcy include:Divorce.Expensive Medical Bills caused by a disability or illness.Poor Financial Management related to student loans, purchasing a car or home, etc.Reduced income or job loss.Unexpected emergencies, such as a car breaking down or catastrophic damage to your property.

How long does a Chapter 11 stay on your credit report?

10 YearsHow Long Does Bankruptcy Stay On Your Credit Report?Bankruptcy ChapterBankruptcy Record Removed After*Chapter 710 YearsChapter 1110 YearsChapter 127 YearsChapter 13 (Discharged)7 Years1 more row•Sep 14, 2016

What debt Cannot be discharged through bankruptcy?

Filing for Chapter 7 bankruptcy eliminates credit card debt, medical bills and unsecured loans; however, there are some debts that cannot be discharged. Those debts include child support, spousal support obligations, student loans, judgments for damages resulting from drunk driving accidents, and most unpaid taxes.

How does Chapter 11 affect a personal credit report?

If you are operating as an LLC or corporation, a business bankruptcy under Chapter 7 or 11 should not affect your personal credit. However, there are exceptions. As mentioned above, if you signed a personal guarantee for a debt, you will be liable for that debt if the business can't pay it.Jan 26, 2021

Can a company survive Chapter 11?

Chapter 11 can include a certain amount of downsizing and liquidation, but many businesses can survive this process and reorganize successfully.Jan 23, 2021

What is the role of a trustee in bankruptcy?

The U.S. Trustee or Bankruptcy Administrator. The U.S. trustee plays a major role in monitoring the progress of a chapter 11 case and supervising its administration. The U.S. trustee is responsible for monitoring the debtor in possession's operation of the business and the submission of operating reports and fees.

What is an automatic stay in bankruptcy?

The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. As with cases under other chapters of the Bankruptcy Code, a stay of creditor actions against the chapter 11 debtor automatically goes into effect when the bankruptcy petition is filed. 11 U.S.C. § 362 (a). The filing of a petition, however, does not operate as a stay for certain types of actions listed under 11 U.S.C. § 362 (b). The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.

What is a chapter 11 committee?

The committee is appointed by the U.S. trustee and ordinarily consists of unsecured creditors who hold the seven largest unsecured claims against the debtor. 11 U.S.C. § 1102. Among other things, the committee: consults with the debtor in possession on administration of the case; investigates the debtor's conduct and operation of the business; and participates in formulating a plan. 11 U.S.C. § 1103. A creditors' committee may, with the court's approval, hire an attorney or other professionals to assist in the performance of the committee's duties. A creditors' committee can be an important safeguard to the proper management of the business by the debtor in possession.

How long does a debtor stay in possession?

A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases.

Is an examiner required in a chapter 11 case?

The examiner is authorized to perform the investigatory functions of the trustee and is required to file a statement of any investigation conducted.

Can a bankruptcy discharge be made non-dischargeable?

It does not, however, discharge an individual debtor from any debt made nondischargeable by section 523 of the Bankruptcy Code. (1) Moreover, except in limited circumstances, a discharge is not available to an individual debtor unless and until all payments have been made under the plan. 11 U.S.C. § 1141 (d) (5).

Can you modify a bankruptcy plan before confirmation?

Moreover, under section 1126 (f), holders of unimpaired claims are deemed to have accepted the plan. Under section 1127 (a) of the Bankruptcy Code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11.

What is adequate protection in bankruptcy?

During the Chapter 11 case, a lender who has a lien on the debtor’s assets is entitled to “adequate protection.” Adequate protection is defined in Section 361 of the Bankruptcy Code and provides for a debtor to: (1) make a cash payment or payments to the extent the stay results in a decrease in the value of its collateral; (2) provide the creditor an additional or replacement lien; or (3) granting other relief that will result in the “realization” of the “indubitable equivalent” of the creditor’s interest in its collateral. However, creditors that lack collateral (“ unsecured creditors ”) are not entitled to adequate protection payments. Creditors who are undersecured (their collateral is worth less than the amount of the debt) will only be entitled to “adequate protection” on the secured portion of their claim to the extent they can demonstrate the value of their collateral is decreasing. Only fully secured creditors will be entitled to post-petition interest. Obviously, valuation of a lender’s collateral is the key to this analysis and a lender may need to provide evidence to the Court, possibly through the use of expert testimony, in a dispute regarding valuation of collateral/adequate protection.

What is collateral in bankruptcy?

Often a lender’s security interest will include the debtor’s cash (“cash collateral”). A Chapter 11 debtor needs court approval to use cash collateral following the bankruptcy filing. Typically, the debtor will file a motion seeking authority to use cash collateral at the outset of the case. The lender is entitled to adequate protection of its interest in the cash collateral, which usually includes the granting of a lien in the cash collateral generated following the bankruptcy filing. A lender will often use the debtor’s request to use cash collateral as an opportunity to negotiate for certain rights and concessions from the debtor. If the debtor and lender cannot agree on adequate protection, then the Court may hold a hearing and accept evidence from the parties as to the lender’s interest in the cash collateral and the appropriate adequate protection for the lender. For example, if a lender has an interest in accounts receivable it may receive a replacement lien on post-petition receivables. The “replacement lien” is necessary because section 522 of the Bankruptcy Code cuts off a lender’s security interest in property acquired by the debtor after the bankruptcy filing.

What happens if a borrower does not consent to a cooperative liquidation?

However, if a borrower will not consent to a cooperative liquidation by its lender and seeks to attempt to pursue a sale on its own terms or restructure, a bankruptcy filing may ensue. Often, this is done under Chapter 11 of the United States Bankruptcy Code.

Why do you need a replacement lien on accounts receivables?

The “replacement lien” is necessary because section 522 of the Bankruptcy Code cuts off a lender’s security interest in property acquired by the debtor after the bankruptcy filing.

Is filing a bankruptcy claim easy?

Although the claim form used by the Bankruptcy Courts is supposed to be easy to fill out, like many things lawyers do for layman, it isn’t as easy as you’d think.

Can you waive a claim if you don't file a claim?

But, if your claim is not listed correctly, or if the amount of the claim is undetermined (such as a change in medical insurance coverage, or a personal injury claim) you may waive the right to be paid if you don’t file a claim.

Do you have to file a claim in Chapter 11?

In a Chapter 11 case the debtor lists all those who have claims against it, and if the amount is known, states that amount. If you have a claim that is correctly listed in the bankruptcy schedules, you may not need to file a claim in order to be paid. You just have to wait for the court to approve a repayment plan.