Can I Keep My Personal Property in Chapter 11 Bankruptcy?

When an individual or business considers bankruptcy, one of the key concerns for the debtor is often whether business and/or personal assets are kept during the bankruptcy process. In a Chapter 11 reorganization bankruptcy, the debtor-in-possession generally retains all the business and personal property during the process of negotiating the reorganization plan to pay off debtors. This fact distinguishes Chapter 11 from Chapter 7 bankruptcy, in which most personal property (with limited exceptions) is taken to pay off the outstanding debts.

Chapter 11 Reorganization

In both individual and business Chapter 11 bankruptcy, the overall goal is to negotiate and finalize a Reorganization Plan to pay off creditors, while the debtor retains the business and personal assets. Assistance from an experienced Chapter 11 bankruptcy attorney is essential to getting the most desirable result during the reorganization plan negotiations. Since the debtor and the bankruptcy lawyer have significant control over the terms of the repayment plan, it is usually possible to protect the business and personal assets of the debtor, in the absence of special circumstances.

From the time the bankruptcy petition is filed, an automatic stay on debt collection protects the debtor against creditor actions for existing claims while the bankruptcy case proceeds and a reorganization plan is negotiated. The automatic stay is one of the significant benefits of a Chapter 11 case.

A debtor’s business or individual personal asset situation for bankruptcy depends significantly on a wide range of issues. If you consider Chapter 11 bankruptcy, the only way to know the potential effect of bankruptcy on your personal assets is to discuss your circumstances and concerns with an experienced Chapter 11 attorney. While typically a Chapter 11 debtor does not lose personal assets in the bankruptcy process, there are specific situations that may lead to a different result.

Chapter 11 is very different from Chapter 7, especially in terms of the treatment of personal assets. At Wernick Law, we apply over 20 years of complex bankruptcy experience to every Chapter 11 case. Our goal is to protect the client’s interests to the maximum extent, while satisfying the creditors’ committee and court requirements for Chapter 11 reorganization. We encourage you to talk with us about your personal assets if you are considering filing a Chapter 11 petition.

Importance of Legal Representation in Chapter 11

Chapter 11 is the most complex type of bankruptcy. A decision to file should not be made lightly or without substantial discussion with an experienced Chapter 11 lawyer. Attempting to represent yourself or filing without adequate background and preparation poses numerous risks and potential adverse consequences that can derail the entire process. Representation by a knowledgeable Chapter 11 attorney is extremely important to achieving a successful outcome in a Chapter 11 case.

Connect With an Experienced Florida Chapter 11 Lawyer

Wernick Law welcomes Florida businesses and individuals wishing to learn more about the firm’s Chapter 11 reorganization bankruptcy practice to schedule a consultation by calling 561-286-7587 or using the online contact form. Based in Boca Raton, Wernick Law serves clients in South Florida (including West Palm Beach, Broward County, and Miami), Southwestern Florida (including Naples and Fort Myers), Tampa, Orlando, Jacksonville, and elsewhere in the state.