Oct 11, 2014 06:39 AM EDT By Staff Reporter, UniversityHerald Reporter

Mid-Continent University has filed for bankruptcy protection with the United States Bankruptcy Court amid financial chaos.

The University's overall debt is estimated to be anywhere between one and ten million dollars. Mid-Continent owes $1.6 million in outstanding university bills and several millions to over 300 creditors. Their reported assets total $50,000 dollars or less.

Local bankruptcy attorney Sam Wright said that Chapter 11 protects a company from creditors, allowing it to reorganise and figure out a plan for the future.

"One of the benefits of the chapter 11 bankruptcy is the business can continue to operate, and it can reorganize and restructure its debts. So, it is a significant benefit to businesses. They can continue operating and deal with the debt issues it has," Wright said, wpsd local 6 reports.

Tom Butler, chairman of the board at MCU, said that if their petition is approved by a federal judge on Nov. 6, the school can operate and repay their creditors based on an approved plan.

The Christian university, located in the Graves County town of Mayfield, shut down June 30 due to financial problems and loss of accreditation. In April, Midway College decided to waive application fees and provide resources for students who wanted to transfer from Mid-Continent. Other Kentucky universities are also lending a helping hand to Mid-Continent students finish their degrees.

Mid-Continent not only has to deal with bankruptcy issues, but also with a lawsuit filed by professors and high ranking leadership employees for violation of their teaching contracts. Over two dozen plaintiffs claimed that they weren't informed whether their contracts would or would not be renewed. They are seeking $1,000,000 in pay for the current 2014-15 academic year.

Attorney Steve Vidmer said that Chapter 11 bankruptcy filing by the university stops any pending litigation.

"They can last quite awhile, but I think they will determine fairly quickly whether it's going to work or whether it's not going to work," Vidmer said of the bankruptcy proceedings, wpsd local 6 reports. "You can sue somebody and you can win and often times you'll get a piece of paper that say I win, I win. Then you've got to be able to collect on the judgment and if they people don't have anything, that piece of paper is all you got."

See Now: Covert Team Inside Newsweek Revealed as Key Players in False Human Trafficking Lawsuit