Types of Bankruptcy
Choosing among types of bankruptcy after 2005 new laws
Over 98% of all individuals file either Chapter 7 & 13. A case filed under Chapter 11 laws is normally referred to as "reorganization." Chapter 11 provides far more options, with fewer restrictions, yet requires a relatively expensive administration by an attorney who represents the debtor as a debtor-in possession. Large businesses and wealthy individuals favor Chapter 11. For detailed information regarding Chapter 7 and Chapter 13, see Personal Bankruptcy.
Choosing types of bankruptcy - Chapter 11 filings
One of the more unique characteristics of Chapter 11 is the absence of a trustee. In most cases, the debtor is designated as a debtor-in-possession which allows the debtor to stand in the shoes of a trustee with many of the same duties and privileges. These types of bankruptcy are know for complex law, frequent contests, and expensive litigation. The case begins when a petition for relief is filed. The petition may be a either filed voluntarily or initiated by creditors. The Code provides specific conditions which limit involuntary petitions, including the requirement that multiple creditors agree upon necessity. For more information, see:
- qualification - compliance issues for chapters.
- automatic stay - how creditors are stopped from collecting.
- creditor committee - the role of the creditors in Chapter 11.
- fiduciary duties - responsibilities and liability of the debtor.
- different types of bankruptcy reorganization - selecting the best chapter.
- benefits among types of bankruptcy - comparing, analyzing and qualifying chapters.
- choosing the right chapter - selection tips and expectations.
- small business bankruptcy - issues for owners, partners and joint ventures.
- advice on bankruptcy - interview lawyers and law firms.
- hospital and medical bankruptcy - catastrophic injuries and hospital expenses.
- legal bankruptcy types - current laws, amendments, and pending changes.
The standard petition form identifies the debtor by a variety of personal information all of which are subject to cross referencing and verification. The petition also must describe the proposed plan of reorganization. In limited circumstances, voluntary petitions may elect qualification as a small business as provided by 11 U.S.C. 101(51)(C) or 11 U.S.C. 1121(e) which allows for a more streamlined administration and compresses limits. In either instance, once filed, the petitioner automatically becomes a debtor-in-possession as described in 11 U.S.C. 1101. As a term of legal art, this term is defined by statute and permits the debtor to retain possession of all assets, control over the disposition of assets, selectively repudiate contracts, and continue regular business operations. Less frequently, the Court may appoint a trustee which indicates a lack of legal compliance or unwillingness of the debtor to obey court orders.