Virginia Bankruptcy - Chapter 11
A Virginia bankruptcy filed under chapter 11 laws is
frequently referred to as "reorganization". Chapter 11
is more complex than other chapters and offers a wider range of options. Ch. 13 also provides reorganization but
is restricted to allow only individual filers, subject to limits on total debts, income, and plan terms. A
Virginia bankruptcy under Ch. 13 is sometimes referred to as a wage earner plan.
A chapter 11 case begins with the filing of a petition. The petition may be a
voluntarily filed by the debtor or filed by creditors. The code provides specific
conditions which limit involuntary petitions filed by creditors. The standard petition form identifies the debtor by a variety of personal
information all of which are subject to cross referencing and verification and must describe the proposed plan of reorganization. Voluntary
petitions may elect qualification as a small business as provided by 11
U.S.C. 101(51)(C) or 11 U.S.C. 1121(e). Small business classification permits streamlined administration, by
combining administrative hearings and allowing alteration of statutory deadlines and waiting periods.
Virginia Bankruptcy
Once filed, the petitioner automatically becomes a debtor-in-possession as
described in 11 U.S.C. 1101. As a term of legal art, this
term is defined by statute and includes a wide assortment of
responsibilities and privileges.
In chapter 11 filings, the debtor retains possession of assets. The debtor also is empowered to dispose assets
until the plan of reorganization is confirmed, dismissed, converted
to Ch. 7, or preempted by appointment of a trustee by court order. While a Virginia bankruptcy case under chapter
11 is pending, a debtor-in-possession is authorized to continue business operations, pay debts, pay expenses,
and limit or suspend payments to special defined classes of creditors.
Normally a trustee is not appointed in chapter 11 Virginia bankruptcy. A debtor-in-possession continues operation
of the business and/or personal affairs while assuming many roles traditionally performed
by a trustee in consumer cases. 11 U.S.C. 1107(a). The debtor-in-possession prepares the plan, responds to creditor motions and is
liable (including criminal liability) for compliance with applicable laws. In almost all Virginia bankruptcy cases
filed under chapter 11, debtors are represented by an attorney. anyone who files a Virginia bankruptcy case under
chapter 11 potentially receives the greatest range of options, which in turn, requires time intensive legal
expertise to receive these benefits.
The Code provides numerous options for discharge and reorganization of debts. The benefits and burdens upon
debtors varies, and may provide a significant improvement in financial condition. Because the law evolves daily
through legislative and judicial decisions, the assistance of qualified legal counsel is essential to gain the
maximum benefit allowed by law.
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