If your business is in over its head in debt and is unable to make payments, often the most responsible decision is to file for Chapter 11 bankruptcy. Chapter 11 is a relatively rare type of bankruptcy case, however, with only a few thousand businesses and/or individuals filing each year. For this reason, the option of Chapter 11 can often be overlooked when it may be the most beneficial decision for a company.
Who Benefits from Chapter 11?
The most common petitioners under Chapter 11 are businesses that are not looking to liquidate and cease operations as required in Chapter 7. Instead, Chapter 11 allows a company to enter into a reorganization plan under the supervision of the Bankruptcy Court. This plan can address the following issues and more:
Debt reduction
Addressing tax obligations and eliminating levies
Increasing flexibility with commercial landlords or mortgage companies to avoid eviction or foreclosure
Cash flow issues
Pending legal claims or judgments
Impractical financing of equipment
Pending administrative actions
While Chapter 11 is most commonly associated with corporate bankruptcy cases, there are some individuals and married couples who decide to file under Chapter 11, as well. Chapter 7 bankruptcy has strict income requirements that if exceeded, will disqualify you. In addition, Chapter 13 bankruptcy has limits on the amount of debt a filer may have to qualify
Having a skilled Chapter 11 bankruptcy attorney preparing your paperwork and reorganization plan is critical to having your case accepted by the court. An attorney can argue in favor of your plan and negotiate for a reasonable plan for repayment of your debts.
Who Benefits from Chapter 11?
The most common petitioners under Chapter 11 are businesses that are not looking to liquidate and cease operations as required in Chapter 7. Instead, Chapter 11 allows a company to enter into a reorganization plan under the supervision of the Bankruptcy Court. This plan can address the following issues and more:
Debt reduction
Addressing tax obligations and eliminating levies
Increasing flexibility with commercial landlords or mortgage companies to avoid eviction or foreclosure
Cash flow issues
Pending legal claims or judgments
Impractical financing of equipment
Pending administrative actions
While Chapter 11 is most commonly associated with corporate bankruptcy cases, there are some individuals and married couples who decide to file under Chapter 11, as well. Chapter 7 bankruptcy has strict income requirements that if exceeded, will disqualify you. In addition, Chapter 13 bankruptcy has limits on the amount of debt a filer may have to qualify
Having a skilled Chapter 11 bankruptcy attorney preparing your paperwork and reorganization plan is critical to having your case accepted by the court. An attorney can argue in favor of your plan and negotiate for a reasonable plan for repayment of your debts.