Chapter 11 Bankruptcy typically involves a partnership or corporation seeking assistance with the reorganization of debt. While this form of bankruptcy protection is designed for businesses, it can also be utilized by individuals.

When a business files for Chapter 11, it is one of two ways. Either the business owner or debtor files a petition with the Federal Bankruptcy Court or business's creditors submit an involuntary petition. In order for creditors to file an involuntary petition, a series of requirements must be met.

Unless otherwise ordered by the court, the debtor must file:

• A schedule of liabilities and assets
• A schedule of current expenditures and income
• A schedule of unexpired leases and contracts
• A financial affairs statement

If the debtor is a person or individual, he or she must file additional documents with the court including:

• A certificate stating the individual attended credit counseling
• A copy of the repayment plan developed during the counseling course
• Evidence of wages earned for 60 days prior to filing the bankruptcy petition
• A statement detailing net income per month and any expected increases in expenses or income
• A list of interest the debtor has on any student loans at the state and federal level

Generally speaking, a Chapter 11 bankruptcy filing costs an initial fee of $1,000 and an additional administrative fee of $39. These fees are due to the court clerk at the time of filing. In the event an individual cannot afford the fee, the court has the ability to allow him or her to make installment payments. The final payment, however, is due within 180 days of the filing date. When a couple files a joint petition, they are not subject to additional fees. Failure to pay the filing and administrative fee on time can result in the dismissal of the bankruptcy petition as ordered by the judge.

As previously mentioned, Chapter 11 is most often used by businesses. When this business is a corporation, it becomes the debtor. In other words, the personal assets of the company's stockholders are not at risk, aside from what they have invested in the company. In a partnership, the partners' personal assets are subject to the bankruptcy proceedings. This may also require the partners to file for bankruptcy on an individual basis to protect their assets.

The United States trustee is tasked with supervising the bankruptcy administration. The trustee monitors the Chapter 11 proceedings. He or she also conducts a meeting with the creditors. During this meeting, the trustee and creditors have the option of questioning the debtor while under oath. The trustee will also enforce various requirements including the reporting of monthly income, operating expenses, the establishment of new bank accounts, and the paying of taxes and other employee withholdings. These services do come with a cost and are paid by the debtor on a quarterly basis. The fee can range between $250 and $10,000 depending on the debtor's disbursement plan. In the event the debtor fails to comply with the repayment plan and pay the trustee in a timely manner, the trustee has the ability to file for dismissal of the bankruptcy.

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