A Chapter 11 bankruptcy is sometimes called a “business bankruptcy” even though it can also be a good choice for an individual. A Chapter 11 allows a business or debtor to continue their normal operations while they come up with a “plan for reorganization.” In some circumstances they can create a plan for liquidation as well. It is essential to discuss the particulars of the case with a bankruptcy attorney in NJ to determine if it is beneficial for a particular situation. Just like the other types of bankruptcy codes the debtor in a Chapter 11 bankruptcy is trying to get his debts discharged but very few of those who file for this type of bankruptcy come through it with the business and ownership still intact. In the vast majority of cases the Chapter 11 works to form a new entity even though it will usually have the same name as the old company which went bankrupt. The newly formed business typically has new management along with a new structure of ownership. But there remain some very distinct benefits to filing this particular type of bankruptcy.
Each state has its own way of handling bankruptcies and has their own provisions. This is why it is important to visit with a local legal professional who can help you come to an understanding of the laws and guidelines concerning bankruptcies. For those who live inLivingston,New Jersey then they should contact a bankruptcy lawyer in NJ. Most of the differences between states have to do with limits pertaining to debts and income levels which have to be met in order to be eligible to file any particular chapter. Chapter 11 is a type of bankruptcy which is filed by a company when their revenues over the long term are likely to be much higher than the value were they to liquidate assets. This ensures their creditors that they will get more money back by allowing the company to reorganize and create a payment plan. In these cases the companies becomes a “debtor in possession” and maintains the ownership and control of their assets and are allowed to continue the regular operations of the business.