CHAPTER 11 BANKRUPTCY
No matter how savvy and adaptive a business owner is, sometimes a business’ debts become too unwieldly to manage. Chapter 11 bankruptcy, which involves a reorganization of a debtor’s business affairs, debts, and assets, may be an option if a business requires time to restructure its debts and pay them over time. The filing of Chapter 11 bankruptcy allows the business to keep operating, and in most cases, the debtor continues to run the business subject to oversight through the bankruptcy process. Chapter 11 cases are usually filed by corporations, and limited liability companies, although it is possible for individuals to file under Chapter 11 if they have too much debt or income to qualify under Chapters 7 and 13.
A Chapter 11 case begins upon the filing of a Chapter 11 bankruptcy petition filed by the debtor. Following this filing, the Bankruptcy Code imposes an automatic stay that can delay or keep creditors from attempting to collect the debt owed to the creditor and can keep the creditor from repossessing collateral.
After filing, the debtor has an initial period to come up with a reorganization plan. If no plan is proposed, creditors can propose their own reorganization plans. Chapter 11 reorganization plans are proposals about how the business will operate and pay its financial obligations. Some plans include some downsizing to reduce expenses and free up assets to pay the existing debts. After a plan has been proposed, certain creditors vote whether to accept it, and the bankruptcy court also has to approve it. These Chapter 11 reorganizations can last several years. In the event that the plan can’t be completed, the cases are frequently converted to one under Chapter 7.
Both creditors and debtors need the counsel of knowledgeable bankruptcy attorneys during this process. If you are a creditor in a Chapter 11 case, we can help you file your proof of claim as well as protect your interests in collateral. If you are considering filing a bankruptcy case as a debtor, our lawyers will help you classify your debts into the proper categories (i.e., secured claims, cost of administration claims, priority claims such as state and federal tax claims, unsecured claims, etc.), and we can help you try to get your reorganization plan filed and confirmed by the court.
We Can Help
Bankruptcy lawyers are experienced in helping individuals or businesses navigate the legal complexities involved with bankruptcy law and serve as unbiased advisers during what can be a stressful and emotional process, protecting you from mistakes, uncertainty and harassment. At Hill Evans Jordan & Beatty PLLC, our bankruptcy practice is led by Rett Saslow, a 40 year-plus veteran in debt relief matters who is a Board Certified Specialist in Consumer and Business Bankruptcy and who also serves as a Chapter 7 bankruptcy trustee. He, along with the other bankruptcy attorneys and staff, can help individuals understand and navigate this process, with the ultimate goal of providing you with a fresh start.
To find out if bankruptcy is an option for your situation, contact one of our experienced bankruptcy attorneys. Call 336-379-1390 to schedule your free consultation today.
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