What is a “debtor-in-possession budget” in a Chapter 11 bankruptcy?

A debtor-in-possession budget is a budget plan required by Chapter 11 of the Bankruptcy Code in Florida. This budget outlines how the debtor will use their available income and expenses in their daily life, during the Chapter 11 bankruptcy case. The budget must include income and expenses such as necessary living expenses, other routine operations, the payment of administrative claims, and the service of debt obligations. The budget must be approved by the court when the bankruptcy case is first filed. The debtor must update their budget throughout the case to reflect changes in circumstances. This includes any changes to income, expenses, or assets of the debtor that may occur during the case. The debtor will also need to submit monthly reports that provide a detailed breakdown of their income and expenses. The court will review these reports to ensure that the debtor is following the debtor-in-possession budget. If the debtor fails to follow the budget and report their income and expenses accurately, they could face penalties from the court. A debtor-in-possession budget is an important component of a successful Chapter 11 bankruptcy case. It helps the court ensure that the debtor is using their income and expenses in an appropriate manner to help them satisfy their debt obligations. This helps creditors and the court understand how the debtor is managing their affairs during the bankruptcy case and provides an accurate picture of their financial situation.

Related FAQs

What is a “debtor-in-possession budget” in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts