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

A debtor-in-possession budget is a type of budget that is used in Chapter 11 bankruptcy cases. This budget describes the estimated future income and expenses of the debtor during the bankruptcy process. In Chapter 11 bankruptcy, the debtor, referred to as the “debtor-in-possession” (DIP), is the entity that remains responsible for managing their assets and budget. The DIP budget also includes estimates of the debtor’s disposable income. The DIP budget is required to be filed within 14 days of the debtor filing for bankruptcy. This budget is subject to the approval of the court and must be submitted within a specified time frame to allow the court to assess the debtor’s financial capability and capacity to pay creditors. The budget must provide a detailed list of all the debtor’s income and expenses along with a reasonably accurate forecast of the future cash flow. The DIP budget is an important tool that helps the court, creditors, and other parties involved in the bankruptcy to better understand the debtor’s financial situation. It helps the court determine if the debtor can complete their required payments and if they require additional financial assistance. The budget also allows creditors to assess the debtor’s ability to pay back debts and decide whether or not to provide additional financing. The DIP budget is a key component of the Chapter 11 bankruptcy process in North Dakota.

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

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