Businesses and individuals in North Carolina may be allowed to file for Chapter 11 reorganization bankruptcy. Individuals may be required to file for Chapter 11 protection if their unsecured debts exceed $419,275 or their secured debts exceed $1,257,850. In such a proceeding, the individual or business that has asked for protection from creditors becomes a debtor-in-possession. This means that a person or entity gets to keep its assets and has many of the same powers as a bankruptcy trustee.
The person or entity who files also becomes a debtor, and the debtor-in-possession is able to obtain loans on the debtor’s behalf. Generally speaking, any actions that the debtor-in-possession takes must be approved by the court, and creditors may ask that a traditional trustee be appointed to oversee the case. A bankruptcy court may also order that a trustee oversee the case.
Debtors are required to present reorganization plans to its creditors for approval, and any plan that is proposed must be approved by the judge overseeing the case. An outside party will usually help to ensure that plan payments are made on time. A Chapter 11 case is typically discharged when the majority of plan payments have been made. The fee to file a Chapter 11 case is $1,167, but debtors will need to account for administrative and other costs associated with such a proceeding.
Those who have significant personal or business debt may be able to improve their financial outlook by filing for bankruptcy. Filing for Chapter 11 bankruptcy may make it possible to reorganize, reduce or eliminate some or all debts without having to give up property. This means that a company might be able to operate while a case is ongoing. An attorney may help those who are seeking protection from their creditors.