A chapter 11 bankruptcy begins with the filing of a voluntary petition
in the district in which the debtor resides or is domiciled. Similar to
other chapters in bankruptcy, an individual filing for chapter 11 must
complete the credit counseling course
prior to filing their bankruptcy. The court filing fees associated with a chapter
11 is $1,717.00 – generally individuals filing under chapter 11
do so because they don’t qualify to file under a chapter 7 or 13.
Similar to other chapters of the bankruptcy code, the filing of a chapter
11 stays judgments, foreclosures, repossessions and most collections that
arose prior to the filing of the case. A creditor seeking relief from
the stay must petition the court and receive approval prior to taking
The United States. Trustee’s office plays a crucial role in the administration
of a chapter 11 case. It monitors the debtor’s operating reports,
application for compensation by professionals, the plan of reorganization
filed with the court and creditor committees. The debtor is required to
open and maintain a new bank account for the chapter 11 estate. This is
referred to as the “debtor in possession” account.
During the initial 120 days of the filing, only the debtor can propose
a plan of reorganization outlining how his or her creditors will be treated
– known as the exclusive period. This period can be extended by
motion. At the expiration of the exclusive period, creditors can file
a competing plan. Section 1123(a) of the bankruptcy code outlines the
mandatory provisions of a plan proposal. Creditors not satisfied with
their treatment can file an objection to the plan.