Chapter 11 allows qualified individuals and businesses to reorganize their obligations and pay their debts over time. A Chapter 11 bankruptcy is commonly referred to as “business reorganization.” Chapter 11 is almost always limited to business bankruptcy filing although it is a rarely used option for individuals. Businesses that elect to file Chapter 11 bankruptcy can continue to operate their business while paying off their debts. Chapter 11 Bankruptcy can be a perfect solution to resolve overwhelming financial problems of companies where excessive debts or losses, business down turns or unmanageable market situations have created a situation which cannot be overcome with conventional tactics.
Stop Collections, Foreclosure, and Repossession
A Chapter 11 bankruptcy begins by filing legal documents with the local (Federal) bankruptcy court. Once the bankruptcy has been filed you gain the benefit of protection from creditor collection efforts through the provisions of the “Automatic Stay”. This includes collections letters, phone calls, foreclosure and repossession. Next, you need to provide to the Court written “Schedules” and “Statements” that delineate your total debts, current revenue and expenses, existing contracts, obligations and lawsuits which will be used to create a repayment plan.
Chapter 11 Bankruptcy Information
A Chapter 11 Bankruptcy filing has no upfront qualifying requirements in terms of the amount of debt owed, business type or structure. There are various benefits that a debtor gains from a Chapter 11 Bankruptcy filing. A business in serious financial difficulty may continue to operate without danger of immediate closure by its creditors via lawsuits, enforcement of judgments, liens as well as turnover orders. This breathing spell is supposed to provide the debtor with an opportunity to attempt the successful reorganization of its financial affairs. The debtor’s breathing spell lasts until the statutory time to propose a plan of reorganization which is usually 120 days or until the automatic stay if lifted by a creditor.
Depending upon your circumstances there may be viable alternatives to filing for bankruptcy. These options can often be handled outside of court, allow you to keep control of your financial affairs and avoid the expense and hassles of filing for bankruptcy relief. We can help you to assess your situation and determine if you have non-bankruptcy options. We can help you to draft agreements with creditors and navigate to a better financial situation.
Chapter 11 bankruptcy filings begin a very complex and time consuming process. A big drawback to Chapter 11 is that the filer loses much control as the Court and the creditors will become actively involved in your financial affairs. It is imperative to hire an experienced and competent Chapter 11 bankruptcy attorney to handle this type of bankruptcy filing. Our firm has the experience and knowledge to handle your Chapter 11 bankruptcy case. Give us a call today to learn more about filing Chapter 11 bankruptcy.