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

A “debtor-in-possession financing statement” in a Chapter 11 bankruptcy is a document filed with the Washington State Secretary of State to provide notice of an ongoing debt to creditors that is, in essence, a “notice of collateral.” The statement is filed to put creditors on notice that the debtor is still in possession of the collateral asset, which could be anything from real estate to a bank account. The debtor-in-possession financing statement is important to creditors because they have the right to repossess a collateral asset if the debt is not paid in full. In a Chapter 11 bankruptcy, the debtor must provide evidence that the collateral asset is still in their possession. By filing the statement, creditors are protected and the debtor is able to still use the asset. When filing a debtor-in-possession financing statement, the debtor must provide the creditor with information including the legal name of the debtor, the type of debt, the date of the financing statement and the property that secured the debt. In addition, the debtor is required to provide the name and address of the person to whom the financing statement should be sent. The statement must also be signed by the debtor. In Washington, the debtor-in-possession financing statement must be filed in order for the debtor to retain possession of their collateral asset during the Chapter 11 bankruptcy process. It is important for the debtor to be aware of their rights and obligations in order to remain in compliance with the laws of Chapter 11 bankruptcy.

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

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