Are there any restrictions on how much I can borrow during a Chapter 11 bankruptcy?

In New York, there are several restrictions placed on how much you can borrow while you are in Chapter 11 Bankruptcy. First, you must have permission from the court before you are allowed to borrow any money. This is known as the "Absolute Priority Rule" and is designed to protect creditors. The court will only allow you to borrow money if it is necessary for the success of your proposal to restructure your debt. Second, you must have a plan for repaying any money you borrow. This plan must be approved by the court. The court will also need to see that you have a reasonable expectation of being able to repay the loan. Third, the amount of money you borrow should not exceed the value of your assets. You must not put yourself in further debt after filing for Chapter 11 bankruptcy. Finally, the court must approve any loan or other credit before you can take advantage of it. This means that you cannot borrow money from family or friends without approval from the court. In summary, while you can borrow money during Chapter 11 Bankruptcy, you must receive court approval for any loan or credit you take out. The amount borrowed must not exceed the value of your assets, and you must have a plan for repaying the loan.

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Are there any restrictions on how much I can borrow during a Chapter 11 bankruptcy?

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