What is Chapter 11 bankruptcy? Essentially, when a business does not qualify for Chapter 7 and 13, they must file for Chapter 11 bankruptcy, which is a type of bankruptcy specific only to businesses and corporations.
Luckily, Chapter 11 has evolved from how it was structured in the past when only large businesses could afford the costs of the filing process.
Today, both large and small businesses can file for Chapter 11 when attempting to restructure their finances and keep their doors open.
If you are considering filing Chapter 11 bankruptcy, read on to learn more about whether you qualify, and if so, what you should expect from the process.
Generally, businesses file for Chapter 11 bankruptcy when they need time to reorganize after a downturn.
If your business was already struggling before hard times hit, and it’s apparent that, following your bankruptcy, operations will continue to struggle, then Chapter 11 may not be the appropriate course of action for your interests.
However, if your business is thriving, then filing can actually permit the time that you need to perfect your strategy for success.
Unlike Chapter 7 and 13, Chapter 11 bankruptcy allows business owners to maintain total control of their business’s financials. However, they will assume the title of “debtor in possession” for the duration of the litigation.
The ultimate purpose of filing for Chapter 11 bankruptcy is to create a repayment plan that satisfies the creditors and court, while allowing the company to continue operations as usual.
If you are successful at filing, you should expect minimal downsizing within your company in order to meet the financial demands—but to the point where the success of your business is in jeopardy.
Suppose you decide that filing for Chapter 11 bankruptcy is the best solution for your company. In that case, there are steps that you and your lawyer must take to begin the filing process. First, you must submit all forms outlining your income, property, assets, and other relevant information to the bankruptcy court.
Then, depending on the location of incorporation, debtors can choose to file in the state of their business, or in their home state.
Furthermore, your bankruptcy case does not have a set time period for completion. However, most cases take at least six months to reach agreeable terms.
After submitting all relevant forms to the judge presiding over your case, you, your shareholders, and your lawyer can begin planning company reorganization strategies.
In order for reorganization plan confirmation, all parties must agree upon a variety of different things.
For one, they must agree that the plan is feasible and likely to succeed (in that the business will continue operating in addition to paying the debts).
Also, they should agree plan was proposed in good faith and not in an attempt to manipulate the law.
Further, the plan should keep the best interests of the creditors in mind, while also remaining fair and equitable for the debtor.
If determined that your proposed plan does meet all of these qualifications, the reorganization plan and all it entails go into effect immediately. Once your plan goes into effect, you must uphold your end of the bargain, or else you could experience additional fees.
The plan could be disassembled altogether if determined that your business is unviable and thus cannot make the necessary payments.
Of course, before ever beginning the process of filing for Chapter 11 bankruptcy, you should first start by discussing your legal options with a bankruptcy lawyer.
A lawyer will be able to guide you on how to proceed and present your case to the court. They can ensure that you have all the necessary documents and information when filing.
Therefore, when you make the hard decision of filing for bankruptcy, do so with the assistance of an experienced lawyer.
We know that filing for bankruptcy can be a stressful and overwhelming process for clients. The bankruptcy attorneys at Blue Bee work hard to make the process as stress-free as possible for our clients. Call us at (801)285-0980 or visit our website at https://bluebeebankruptcy.com/ for more information.
At Blue Bee Bankruptcy, our lawyers are highly experienced in the various filing options. More importantly, we understand that each case we receive is unique and each client has different needs and goals. We will discuss these signs with you and decide the best route to take.
We strive to help our clients rebuild their lives and take steps toward a better financial future through filing.
If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.
Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!
Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-098.
