Duties in Legal Bankruptcy Types for Consumers
The operation of law in Chapter 11 is quite different than Chapter 7 or 13. As a starting point, the provisions allowing debtors comprehensive authority to retain possession of assets, continue business operations, transfer property, selectively pay creditors, and repudiate contracts - all create complex legal standards of care that must be followed. Creditors frequently object to the use of discretion when colliding with the best interest of creditors. For more information, see:
Of all bankruptcy types, Chapter 11 accounts for less than 2% of all cases filed with U.S. Bankruptcy Courts. Most debtors prefer to file Chapter 7 because it is cost effective. However, after October 17, 2005, qualification for Chapter 7 requires proof of income, before filing, was below the state median income level.
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