Charles J. Schneider, P.C.certified consumer bankruptcy specialist
forms for your office visit
call today 734-237-1523
Practice Areas Menu In This Section

The role of the Chapter 11 debtor in possession

In our last Wayne County bankruptcy law blog post, we made a reference to the term "debtor in possession." Let's take a little closer look at the meaning of debtor in possession according to the U.S. Courts website. The following is intended not as specific legal advice, but simply as general information.

Once a business has filed for Chapter 11, the debtor named in the filing takes on an additional role, almost like a separate identity. That is the role of the debtor in possession. The term simply means that the debtor keeps its own assets (in this case, the business) while undergoing reorganization. A liquidation bankruptcy, in contrast, would call for the appointment of a trustee to take possession of the debtor's assets. It's possible for a Chapter 11 trustee to be appointed in some situations, but rare.

The debtor in possession has the powers of a Chapter 11 trustee as well as the responsibilities. He or she can hire legal professionals to help out with the legal process; accountants to review the books; perhaps even auctioneers to sell off some assets. On the other hand, the debtor in possession will be held ultimately accountable for the property in question; filing tax returns and reports as requested by the court; and reviewing claims as well as objecting to them if necessary.

The U.S. trustee will supervise both the bankruptcy filing and the debtor in possession's management of the business. The debtor in possession may have to answer questions posed by the U.S. trustee and creditors' committees under oath. Bankruptcy law professionals are also often called upon to advise a debtor in possession on how to navigate these and other complex business bankruptcy issues.

Source: United States Courts, "Reorganization Under the Bankruptcy Code," accessed on Dec. 5, 2014

No Comments

Leave a comment
Comment Information
  • rating

    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

  • rating

    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

  • rating

    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

  • Avvo Rating 10.0 superb | Top Attorney Bankruptcy
  • Rated By Super Lawyers Charles J. Schneider | visit | super lawyers 2011-2015
  • Avvo Ratting 10.0 superb Top attorney chapter 7
  • Avvo clients' choice 2014 | chapter 7
  • American board of certification | certified consumer bankruptcy specialist
  • AV lexisNexis Martindale-Hubbell Peer Review Rated for ethical standards and legal ability
email us for a response

Let us evaluate your situation
and identify solutions

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy