What is a “property settlement agreement” in a Chapter 11 bankruptcy?

A property settlement agreement (PSA) in a Chapter 11 bankruptcy is an agreement between the debtor (the person filing for bankruptcy) and their creditors to settle a debt for an amount that is less than the full amount owed. This agreement must be approved by the court, and it will be created to ensure that the creditors have enough money to be paid for their debt. A PSA typically will include terms such as the total amount owed, payment plan, and interest rate. The agreement will also ensure that the creditors receive their expected payment in a timely manner. The PSA can help the debtor avoid foreclosure of their property or other types of losses in the event that a full repayment plan cannot be achieved. Under a PSA, the creditors agree to accept a portion of the debt due to them, thus allowing the debtor to free up some of their assets. It also gives the debtor more control over their debt repayment, as it will be customized to their individual needs and the creditors will be limited in the amount of interest they can charge for the settlement. At the end of the agreement, any remaining debt is discharged by the court and the debtor will not owe it. This can help the debtor by reducing the amount of money they have to pay each month, as well as providing some financial stability. In New Hampshire, a PSA can be used as part of a Chapter 11 bankruptcy to help the debtor address their debt in a more manageable way.

Related FAQs

What is a “property settlement agreement” in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts