Chapter 11 bankruptcy is referred to as a “reorganization,” because it allows businesses, individuals, and married couples to retain assets and continue business operations under the supervision of the bankruptcy court and the United States Trustee. A business or person in a chapter 11 case can restructure their debts through a chapter 11 plan, which must be voted on and approved by creditors. There are now three different types of chapter 11 bankruptcies, including small business cases and Subchapter V cases (which have simplified requirements and are less burdensome for small businesses).
The main benefit of a chapter 11 case is the ability for a business to continue operating after filing. This can provide breathing room to set up a plan for restructuring debts and getting a business back to profitability. Businesses can often change the terms of existing loans through a chapter 11 plan. In some cases the plan can last longer than five years, allowing debts to be paid over a longer period of time. In others you can pay less than the full amount owed to your unsecured creditors (those without a lien on assets). In sum, a chapter 11 case can be a great way for a business get back to doing what it does best.
Chapter 11 cases usually have higher upfront retainers because attorneys will have to be paid while preparing a chapter 11 plan. If you have questions about these costs, please feel free to contact us.
We suggest setting up a free initial consultation to find out. Paul Schofield has many years of experience in reviewing business’ financial situations and making recommendations for addressing financial problems. If you decide to file, he can help you decide which type of chapter 11 case would be the most beneficial for your business, and he will personally take the time to go over your situation and the bankruptcy process with you. He will never pressure you into filing for bankruptcy if it is not your best option. If you decide to file, Paul will be by your side through the entire process to ensure that you achieve the best possible outcome for your business.
Call 912-275-7018 today to set up a free initial consultation!