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Individuals have always had a difficult time reorganizing under Chapter 11, and many who represent individual debtors believed that the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA” or “2005 Amendments”) would make it easier for individuals to operate and reorganize under Chapter 11. Several amendments to the Chapter 11 provisions of the U.S. Bankruptcy Code were added and amended to create a similar path that individuals follow under Chapter 13. Unfortunately, either as an oversight or by design, certain provisions that exist under Chapter 13 were not included in the Chapter 11 provisions, and recent cases have made the reorganizations of individual Chapter 11s in those jurisdictions as difficult as prior to the BAPCPA. This article discusses the major uncertainties that currently exist in these types of cases.
Post-Petition Income
BAPCPA added Code ' 1115, which added to property of the estate under ' 541 all “earnings from services performed by the debtor after the commencement of the case.” This provision is identical to Code ' 1306 that exists for Chapter 13 cases, and one would expect it to operate in a Chapter 11 case with similar results. But because of the failure of Congress to also amend companion sections relating to post-petition operations, the Chapter 11 debtor must face obstacles that do not exist for the Chapter 13 debtor.
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