As an individual in New York who has fallen into dire financial straits, you may be able to file Chapter 11 bankruptcy. However, it is more common for a business to file Chapter 11. Eligible businesses include partnerships, sole proprietorships and corporations. Chapter 11 allows businesses that would otherwise not be able to file Chapter 13 to reorganize their debt.
According to United States Courts, when you file Chapter 11, you must include two essential documents: a reorganization plan and a written disclosure statement. The reorganization plan classifies debts and describes the treatment each of the classes will receive. The disclosure statement includes information about your business affairs, assets and liabilities. The court will use this information, in addition to input from your creditors, to decide whether to confirm the plan during a confirmation hearing.
Chapter 11 starts with a petition. You may file a petition on your own behalf, which is a voluntary petition. If you and your spouse both want to file Chapter 11 and are eligible, you may file individually or jointly. However, creditors that meet certain requirements can also file an involuntary petition for Chapter 11.
When you file voluntarily, whether as a business or an individual, you must include the following with your petition:
- A statement of financial affairs
- A schedule of unexpired leases and executory contracts
- A schedule of assets and liabilities
- A schedule of income and expenditures
There are additional requirements when you file as an individual or jointly with your spouse that do not apply when you petition on behalf of your business.
The information in this article is not intended as legal advice but provided for educational purposes only.