What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy is a type of bankruptcy available to individuals and businesses in Michigan. It is also known as “reorganization” bankruptcy, as it allows individuals and businesses to reorganize their finances, repay creditors, and continue operating. Through Chapter 11 bankruptcy, debtors can reduce their total debt by restructuring their loans, and creditors are paid a portion of the remaining debt. In order to file for Chapter 11 bankruptcy, the debtor must have unsecured debt and any secured debt must not exceed a certain amount. The debtor also must have a payment plan to demonstrate how the debt will be paid over a set period of time, usually 3-5 years. The payment plan must be approved by the court in order for the bankruptcy to be accepted. Once the bankruptcy is accepted, the debtor and his/her creditors must go through a mediation process, called a “meeting of creditors.” During this meeting, the debtor and their creditors must come to an agreement about the repayment of debts. After the repayment plan is finalized, the court will order the payments and monitor the debtor to ensure that all payments are made. Once the payments are complete, the debtor’s debt is discharged. Chapter 11 bankruptcy is often the best option for individuals and businesses in Michigan, but it is important to be sure that all of the necessary requirements are met before filing a petition. In addition, it is important to consult with a lawyer or financial advisor to ensure that it is the best option for the debtor’s particular situation.

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What is Chapter 11 bankruptcy?

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