Chapter 11 – Reorganization for business and high debt individuals

Reorganization (for business and high debt individuals)- This is similar to Chapter 13 in that it involves repayment of the debt, however it is much more involved and expensive

Debtor-in-possession – There is no trustee in a Chapter 11. The Debtor is the trustee we call that Debtor in possession. The Debtor is supposed to do all of the things that the trustee would do. This requires the debtor to know what a trustee is supposed to do and to do it. That means that the Debtor’s attorney will be telling the debtor what to do and making sure the debtor does it. That means that the attorney and the debtor have a lot of work to do and that means that the attorney’s time (which is money) gets spent helping the debtor. That makes Chapter 11 very expensive.

Creditors get to vote on plan – The big difference between a Chapter 11 and a Chapter 13 is that the creditors get to vote on your plan of reorganization. In a Chapter 13 if your creditors do not agree with the way they are being treated in your plan the only thing they can do is object to your plan. If your plan meets all of the legal requirements of a Chapter 13 then you can confirm the plan over the objections of the Chapter 13 creditors. In Chapter 11 the creditors get to vote on your plan. If they do not like the way they are treated in your plan they can vote NO on your plan and if enough of them vote NO you cannot confirm it.