Skip to Content
Call Us today! 937-403-9033

What is Chapter 11 Bankruptcy, and How Does it Work?


People often refer to chapter 11 bankruptcy as a "reorganization" bankruptcy. It is available in Ohio for either business or personal debt. A debtor can use this type of bankruptcy to reorganize all outstanding debts into a manageable payment plan. The court considers both current income and future increases in income for the full length of the bankruptcy case when determining maximum payment amounts.

The courts allow the debtor or a creditor who meets certain requirements to file a petition for chapter 11 bankruptcy, and they charge a $1,167 filing fee and a $550 administrative fee for each petition. Couples filing joint petitions only have to pay a single filing fee and administrative fee. Individual debtors may pay these fees in up to four installments, but the debtor must make all payments within 120 days of filing the petition or up to 180 days if the debtor shows sufficient cause to do so.

The court requires a plan including all claims against the debtor and their classifications. The court also requires a written disclosure statement detailing the debtor's assets, liabilities and business affairs, but the court may waive this requirement for small businesses where the plan contains sufficient information. The plan should state how the debtor will treat each classification, and if the plan forces creditors to receive less than their full claim values or to change their contractual rights, those creditors vote on the plan.

Many debtors who would like to pay off their debt and keep their assets file for bankruptcy under chapter 11. In any bankruptcy case, it is important to prepare all financial information and documentation prior to filing to ensure that the court can make an adequate decision on whether to approve it. Situations vary, and this is not a replacement for professional legal advice.

Source: United States Courts, "Reorganization Under the Bankruptcy Code", September 26, 2014