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

A debtor-in-possession budget is a type of budget used in Chapter 11 bankruptcy cases in Minnesota. It is created by the debtor (the person or business filing for bankruptcy) and approved by the court. The budget outlines the debtor’s expected income and expenses and is used to ensure that the debtor’s finances are managed properly while the case is pending. The primary purpose of the debtor-in-possession budget is to serve as a guideline for the debtor to follow while the bankruptcy case is pending. It provides a framework for managing the debtor’s finances and ensuring that the debtor can meet their financial obligations while protecting their assets. It also helps the court to determine whether the debtor has the ability to pay back a portion of their debts through a court-approved repayment plan. The debtor-in-possession budget must be prepared prior to submitting the reorganization plan to the court. It must be based on the debtor’s actual income and expenses, and must include all of the debtor’s assets and liabilities. The debtor must update the budget to reflect any changes to their financial circumstances while the case is pending. The debtor-in-possession budget is an important part of a Chapter 11 bankruptcy case in Minnesota, as it provides the court with an understanding of the debtor’s finances and whether they have the ability to meet their obligations. It helps ensure that the debtor’s assets are protected and that the debtor is managing their finances properly.

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

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