Bankruptcy Chapter 11 Attorney Near Me
Chapter 11 is one of the most complex bankruptcy cases. It requires years of experience and knowledge of complex bankruptcy law issues.
In most cases, chapter 11 is for business debtors whether small or large. In some cases, a personal Chapter 11 case can be filed.
Most recently, chapter 11 bankruptcy introduced a new subdivision of Chapter 11 called Subchapter V of Chapter 11. Subchapter V is perfectly suited for small business debtors who meet the debt ceiling qualifications.
Looking for Chapter 11 bankruptcy lawyers near you, Gaudiosi Law is the best!
Chapter 11 for Large Businesses
Many large businesses have filed for Chapter 11 bankruptcy in hopes of reorganization. Chapter 11 calls for the debtor to formulate a plan of reorganization. Once the plan is formed, a disclosure statement, which outlines the plan of reorganization, is filed with the court. The plan and the disclosure statement are distributed to all creditors for a vote of approval or rejection of the plan.
If the majority of creditors reject the plan, it can still be approved by showing the court that all requirements for the plan’s approval have been met and the plan should be approved. Debtors in Chapter 11 will negotiate with creditors for a better “deal” on the amount of debt they agree to pay back through the plan. The deal may include a reduction in interest rate, a reduction in the principal balance that will be paid, or a combination of the two.
When the case is filed, debtors are required to file “First Day Motions.” These motions allow the debtor to operate the business, pay employee salary, utilities, and other business expenses, use cash flow earned from the business for operating expenses, pay rent or mortgage payments, hire counsel, accountants, and other professionals to help with the case and other requirements depending on the nature of the case.
These First Day Motions need to be filed as soon as the case is submitted to the court. A hearing will be set to argue the motions and hopefully obtain court approval. If the First Day Motions are not approved, it jeopardizes the entire case.
In Subchapter V, a bankruptcy trustee will be assigned the to case. The trustee in a Subchapter V case monitors the flow of the case and helps to negotiate debt between debtors and creditors. The trustee also makes sure documents and forms that need to be reviewed by the court or the U.S. Trustee’s office are properly turned in. The trustee also works with debtors and creditors to formulate a plan of reorganization, which will be more likely to be approved by all parties.
Benefits Of Chapter 11 Bankruptcy For Businesses
There are several benefits businesses can gain from filing Chapter 11 bankruptcy. Here are the major ones:
– Protect your Business
Nobody wants to lose a business they’ve spent their life building. Chapter 11 allows businesses to keep their operations running while they restructure their debts and finances. This means they can continue to generate revenue and potentially emerge from bankruptcy as a stronger and more competitive company.
– Automatic Stay of All Creditor Actions
Filing for Chapter 11 bankruptcy automatically stops most creditor actions, including lawsuits, repossessions, and collections. This gives the business time to reorganize without the constant threat of legal action.
Chapter 11 bankruptcy also gives a business the exclusive right within 120 days to propose a payment plan. This can give the business very needed time to strategize and have control over the situation.
– Sell Property Free And Clear Of Liens And Interests
During the Chapter 11 process, businesses may sell assets that are encumbered by liens. The Chapter 11 court has the authority to allow a buyer to purchase those assets free and clear of the encumbrances that they otherwise wouldn’t be able to purchase.
– Increased bargaining power
Chapter 11 gives businesses more bargaining power when negotiating with creditors. They can reject contracts or leases that are no longer beneficial to the company and renegotiate new terms that better align with their financial goals.
– Potential for debt discharge
While not as common in Chapter 11 as it is in Chapter 7 bankruptcy, businesses may be able to discharge some of their debts through the bankruptcy process.
It’s important to note that Chapter 11 bankruptcy can be a complex and expensive process, and it’s not right for every business. It’s important to consult with a qualified Chapter 11 bankruptcy attorney near you to determine whether Chapter 11 is the right choice for your specific situation.
Chapter 11 Personal Bankruptcy
In most cases, Chapter 11 bankruptcy for individuals involves real estate ventures or small businesses that are not incorporated. An example of a personal Chapter 11 bankruptcy case would be an individual real estate developer who has multiple properties, which have lost value due to the economy. A Chapter 11 debtor can negotiate with mortgages and other creditors who are owed money.
In some cases, mortgage debt can be crammed down from the existing amount owed to the actual fair market value of the property. Another example might be a contractor who has multiple projects going but has unfortunately run too low on cash flow to continue operating.
Filing Chapter 11 as an individual would help these debtors reorganize debt, negotiate with creditors, and make a plan to get their business moving in the right direction. The same First Day Motions are required as any other Chapter 11 case.
Chapter 11 bankruptcy is not for every client. However, many Chapter 11 filers are able to regain control of their business by filing the case and relieving overwhelming debt. Most Chapter 11 bankruptcy lawyers charge legal fees at an hourly rate.
In a few circumstances, chapter 11 can be done for a flat fee. Legal fees can be much more costly in Chapter 11 versus other bankruptcy cases such as Chapter 7 or Chapter 13.
However, for the business debtor, chapter 11 is a great way to keep business going while eliminating debt. If you are a business owner who is struggling to keep the business afloat, give us a call today. We can direct you to the chapter of bankruptcy that is right for you, whether it is Chapter 11, 7, or 13.
Your search for “bankruptcy Chapter 11 lawyers near me” is over. Get the help you need today from the best Chapter 11 lawyers near you to keep creditors from taking over your business.
Call us at 623-777-4760 for a free consultation.