Who Qualifies For A Chapter 11 Bankruptcy?

Any corporation that either has regular cash flow and wants to stay in business but needs to restructure or a corporation that needs to close the doors but has assets they wish to liquidate will be very similar to chapter 13. They have to have a regular income to support a plan, and then although the standard is over $1,257,850 in secured debt, $419,275 in unsecured debt for individuals, those aren’t requirements, just limits on whether an individual could file a 13.

How Long Does The Chapter 11 Bankruptcy Last?

Each case is entirely dependent on a situation. Every single chapter 11 is different. In the cases handled by Bach Law Offices, we have had cases remain open from 6 months to a couple of years. The length of time is dependent on what is needed by the individual or the corporation when they file.

What Did The COVID-19 Bankruptcy Relief Extension Act Do For Individuals Who Want To Take Advantage Of Filing Bankruptcy Now?

Not nearly enough, to be completely honest. It allowed people who were negatively affected by COVID to extend their plans up to two years to lower their payments or even freeze payments so they can complete their plans. That was the only part of that CARES Act that I have utilized for several of my clients to date. There are other aspects of relief that relate to chapter 11, but for the small business or the mid-sized business, the applications of the allowances were minimal. Throughout the year, definitions of income were adjusted to exclude stipends paid out due to Covid-19. A lot remains to be seen as we as a country move forward through the Covid-19 challenges.

Are Federal COVID-19 Related Relief Payments Going To Be Used In The Calculation Of Disposable Income For Purposes Of Confirming A Chapter 13?

No. There is this specific language in the CARES Act that says, “Any income that you get from federal allowance under the CARES Act is not going to be calculated into that means test or current monthly income evaluation.”

Does That Include These Child Care Tax Credits That Are Supposedly Coming This Summer For Individuals With Children?

The language is relatively vague. It says anything enacted by the United States President for relief under the CARES Act would not affect it. Since it’s so ambiguous, we can avoid those stipends being in there.

For more information on Bankruptcy Law in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.