How to Negotiate a Bankruptcy Reorganization


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As the owner or operator of a business facing financial problems, you
have the option to file for Chapter 11 bankruptcy protection. Chapter
11 of the U.S. Bankruptcy Code provides your business the ability to
reorganize. Creditors favor a Chapter 11 reorganization over a Chapter
7 discharge. Through a Chapter 11 reorganization, creditors are able
to recoup at least a percentage of the money owed to them. On the
other hand, in a Chapter 7 bankruptcy, the typical creditor will not
receive any payment on its account.Difficulty:Moderately
ChallengingInstructions Things You'll Need
Petition for
bankruptcy
Chapter 11 bankruptcy reorganization plan
class="error">Prepare a propose
A Chapter 11 bankruptcy, known as reorganization, is beneficial to a
company that wishes to continue in operation. A Chapter 7 bankruptcy,
known as liquidation, is beneficial for a company that no longer
wishes to remain in business. In both proceedings, a portion of the
company's debt is discharged. ConsiderationsWhile both individuals
and businesses can file for Chapter 7 bankruptcy protection, usually
only businesses file uner Chapter 11. Chapter 13 bankruptcy, which is
similar to Chapter 11, is available for
individuals.
FunctionChapter 7 bankruptcy is intended for those
looking to liquidate all assets and receive the largest possible
discharge of debts. Chapter 11 bankruptcy allow
Legal
Filing for bankruptcy results in a negative impact on your credit
report and score, so it may be advantageous to negotiate with your
creditors even if you are in the midst of a bankruptcy case. You may
be able to negotiate out of bankruptcy successfully. By reaching
accommodations with your creditors, you'll have a better chance of not
only preserving but even improving your credit report and score than
is possible through a discharge of your debts at the end of a
bankruptcy case.Difficulty:Moderately ChallengingInstructions
Things You'll Need
Letter to bankruptcy trustee regarding desire to
settle with creditors
Written settlement proposals to
creditors
Settlement agreement
Legal
Chapter 11 of the Bankruptcy Code is different from the more common
Chapter 7 in that it does not mean an immediate liquidation of assets.
Chapter 11 bankruptcies protect the filer from creditors while giving
the filer time to create a repayment plan. Assets are not liquidated
to pay for debts, and the business itself remains in operation and is
even allowed to receive financing in order to put its affairs into
order. Under Chapter 11, creditors would typically receive more than
a Chapter 7. New RulesOn October 17, 2005, Chapter 11 of the U.S.
Bankruptcy code was amended, making it more costly for firms to file
and stemming the abuse of bankruptcy protection. Some firms that have
decla
Personal Finance
Negotiating with the lender on the second mortgage on your home can
sometimes be a very tricky task to accomplish. However, filing for
bankruptcy gives you some degree of leverage in negotiating with the
second mortgage lender in that neither it nor the holder of the first
mortgage can foreclose until the bankruptcy automatic stay is lifted.
Therefore, if you have filed for bankruptcy, it is the perfect time to
negotiate with the holder of your second
mortgage.Difficulty:ModerateInstructions File your bankruptcy with
your local bankruptcy court. Seek the aid of an experienced bankruptcy
attorney if at all possible. If it is very difficult or impossible to
make the payments on your second
Personal Finance

Patriot Coal Corp. filed for Chapter 11 bankruptcy
protection on Monday as it deals with reduced demand for coal and
rising costs.
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Business

AP - Tribune has filed a bankruptcy reorganization plan
that would allow it to keep its newspapers and broadcast stations
while sharply reducing the debt that has threatened to sink the media
company.
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Business

AP - The Tribune Co. filed a bankruptcy reorganization plan
that would allow it to keep its newspapers and broadcast stations
while wiping out most of its debt, even as two groups of lenders vowed
to unravel a pivotal part of the proposal.
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Article
Business

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