Filing a bankruptcy petition is a very serious personal decision that should not be taken lightly because it can have a long-term impact on the life of the petitioner. Many people are hesitant to file for bankruptcy protection under any chapter because they understand the resulting damage to their credit rating, but that may not be the case in certain situations. It is easy to accumulate excessive financial obligations, and many individuals only need a payment restructuring as opposed to filing for a discharge of debt or entering into a five-year repayment plan that is associated with a Chapter 13 filing. There may be more debt discharge available in a Chapter 7 petition, but the damage can be extensive for further credit. Chapter 11 bankruptcy could actually be the answer for certain people who have assets they want to protect without having a home in jeopardy of repossession. Not only can a Chapter 11 reconstruction plan alleviate mounting financial obligations, it can also protect credit scores as well as clear personal assets. Fort Wayne attorney Fred Wehrwein P.C. has significant experience in representing personal Chapter 11 cases, and he understands how to craft an effective petition for maximum protection.
The Cons of Chapter 13 and Chapter 7 Bankruptcy
Knowing why Chapter 11 may be the right petition is better understood by knowing the problems with a Chapter 13 or Chapter 7 filing. Chapter 13 bankruptcy is largely focused on protecting a mortgaged property, as some form of mortgaged real estate is almost always involved. It is effectively a five-year payment plan intended to make all payments current in total at the end of the program. Emerging from a Chapter 13 repayment plan in good standing is the goal. Chapter 7 must be filed for those who cannot qualify for Chapter 13. It does discharge all unsecured debt, but all clear personal assets are subject to confiscation by the court and sold for proceed payment to the listed delinquent creditors.
Chapter 11 Differences
A Chapter 11 filing will include all outstanding debts and be scheduled for a current payment status at the end of the plan. Unsecured debt is not discharged, but instead is restructured for payment feasibility for the petitioner. Creditors are often repaid in full when all obligations are completed, and clear personal assets are not subject to confiscation to be sold with payment transferred to creditors for outstanding debts. Corporations commonly choose Chapter 11 when they want to restructure assumed debt payment obligations because of this stability. Individuals with significant personal assets can use the chapter as well while repaying outstanding debts over a longer period of time without damaging their credit rating.
It is important to understand that Chapter 11 petitions can be complicated when the creditors evaluate the proposal. Some creditors can be difficult, but they also do not want to force a Chapter 11 filer into a Chapter 7 if they can qualify. Chapter 7 can discharge all unsecured debt, even though the petitioner fallout is not favorable. The negotiation skills of your attorney matter greatly in this process, and it is a real advantage to have an experienced Chapter 11 bankruptcy attorney conducting the terms of an agreement. Each creditor can be different, but ultimately they all want the same final result. A seasoned bankruptcy attorney will supply your own professional negotiator working on your behalf.
Contact an Indiana Chapter 11 Bankruptcy Attorney
A Chapter 11 filing decision can be the best option for many individuals who are seeking a reduction in financial obligation pressure. Your attorney matters. Indiana residents should always contact Fort Wayne bankruptcy attorney Fred Wehrwein P.C. for effective and comprehensive bankruptcy representation.