Liquidating chapter 11 discharge
It also permits the creditors to take a more active role in fashioning the liquidation of the assets and the distribution of the proceeds than in a chapter 7 case.
Liquidation Pros and Cons Any Chapter 11 reorganization plan must be approved by creditors holding at least two-thirds of the total debt amount and more than one-half of the total number of claims.
Chapter 13 can also be filed when individuals have too much disposable income under the Means Test under Chapter 7.
A Chapter 11 bankruptcy filing will immediately stop foreclosures, repossessions, lawsuits and collections.
-- Murphy Plan confirmation is the promised joy after hard fought battles. Courts further are willing to permit third party releases when the creditors themselves have expressly or implicitly consented to the release provisions.
There are two exceptions, enumerated in paragraph (2) and (3) of subsection (d). 109–8, § 321(d)(1), substituted “A discharge under this chapter does not discharge a debtor who is an individual” for “The confirmation of a plan does not discharge an individual debtor”.
And if you're not willing to say goodbye to your small business yet, you may consider filing for Chapter 11 bankruptcy.
Generally, Chapter 11 is intended for the reorganization of businesses with significant debt, and may allow your small business to propose a plan for profitability post-bankruptcy and continue to operate while temporarily keeping your creditors at bay.
That said, it is possible to have liquidation under Chapter 11, and it may benefit debtors and creditors more than Chapter 7 liquidation: In a chapter 11 case, a liquidating plan is permissible.
Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation.