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Debtor in Possession

Debtor in Possession

If a company has filed Chapter 11 Bankruptcy the goal is to reorganize the financial obligations of the company so they can continue business operations. Debtors in Chapter 11 Bankruptcy cases are known as the "Debtor in Possession" after the Chapter 11 Bankruptcy case begins and will allow the debtor in possession to 1) retain their property 2) develop a bankruptcy repayment schedule 3) continue to make money to pay their debts.

The debtor may remain in possession, but if the creditors believe they are mismanaging the business or committing fraud they can request that a Trustee be appointed to manage the bankruptcy process. The debtor in possession duties are outlined in the Bankruptcy Code and Federal Rules of Bankruptcy Procedure. 11 U.S.C. 1106, 1107; Fed. R. Bankr. P. 2015(a) and include the duties that are generally performed by the trustee such as:

  • Examining and objecting to claims.
  • Accounting for property.
  • Filing reports required by the Bankruptcy Court and the United States trustee including monthly operating reports.
  • Hiring necessary professionals including accountants, appraisers and attorneys to help with the reorganization process.

The debtor in possession is also authorized to borrow unsecured credit without court approval, get secured credit, or obtain a super priority lien. One of the benefits of securing financing is the extra capital may provide the liquidity the business needs to pay all the necessary business expenses and complete the bankruptcy process sooner.

More Help on Debtor in Possession

  • Bankruptcy Code - The United States constitution outlined in Article I, Section 8, gave the right of Congress to establish \"uniform laws on the subject of bankruptcies.\" - read more

  • Trustee - The bankruptcy trustee program, created by the United States Department of Justice, manages and oversees the bankruptcy process to improve efficiency and guarantee the integrity of the bankruptcy system. - read more

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The two most common consumer bankruptcies are Chapter 7 and Chapter 13, our sponsoring lawyers handle these types exclusively so you can be sure you are getting accurate legal advice when you file bankruptcy. Our Bankruptcy attorneys will fight to protect your rights and your property, fight the aggressive and annoying creditors for you, and they can help you keep your home, vehicles and other property.

A lawyer will be committed to getting you debt relief and providing you with valuable information, services and advice to get you a better financial future. There are many convenient locations to make filing bankruptcy or learning about the alternatives we offer, even easier.

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