Bankruptcy can be difficult, with the help of bankruptcy attorneys at Adam Law Group you can get the process going and stop worrying so much. There are plenty of different types of bankruptcy out there and taking the time to find out which one is right for you can make a ton of difference in your filing. Chapter 11 is a fairly common type of bankruptcy and we are going to discuss it further here.
What is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is also known as the reorganization bankruptcy and it does involve reorganizing debts and reorganizing your business affairs and assets. Chapter 11 bankruptcy is also considered the most difficult form of bankruptcy and the most complicated overall, that is why an attorney is a fantastic asset in this type of proceeding. With chapter 11, you are going to be able to stay in business if you are filing on behalf of your business and you are going to be able to restructure your obligations and what you are expected to pay back.
Chapter 11 is the most common form of bankruptcy for businesses that want to remain open and working, but that need to reassess their overall structure and how they do business so that they can continue to operate. The purpose of the reorganization is to allow the business to keep doing what it does and not have to shut down entirely. When the restructure is proposed, in order for it to be approved it does have to be in the best interest of the creditors or the creditor can then propose their own plan that is better in their interest.
There are tons of large name companies out there that have filed for chapter 11 bankruptcy but that have remained in operation, K-Mart and General Motors are just two large name examples.
Who is Chapter 11 Bankruptcy Suited for?
This type of bankruptcy is not something that everyone is going to be able to use or that is going to benefit every business. If you have a business and you do not qualify for chapter 7 or chapter 13 bankruptcy, you may qualify for chapter 11. Since it is very complex and difficult to go through, you are likely not going to be able to file this type of bankruptcy on your own and you should work with an attorney to work through your chapter 11 bankruptcy.
If you are a business owner and you have a large amount of debt but you do not want to sell your business or shut down for any period of time, you can opt for this type of bankruptcy in order to be able to stay open and stay working but not worry about your debt ruling every decision that you make. With a chapter 11 bankruptcy, you may not be able to make any major decisions regarding your business without first discussing it with the court.
A good example would be if you do file for chapter 11 bankruptcy then decide that you want to liquidate assets from your business. You would not be able to do this on a large scale without first talking to the court as it means you would be coming into money and would be able to then repay some of your debt with the proceeds from the liquidation. The debtor cannot get a loan that is going to take place after the bankruptcy is completed, and they cannot enter into large contracts.
With chapter 11 bankruptcy you as the filer do have the chance to propose the restructure from the start. This means that you can propose things like downsizing your business, liquidating some assets, reducing your expenses overall and finding ways to reorganize your debt so that you can repay it better and so that you can make the most of your ability to repay.
When to Hire an Attorney?
If you are considering any sort of bankruptcy, it is helpful to hire an attorney right from the start. By hiring an attorney as soon as you decide that you want to file, you can talk with them about the process, figure out what the best form of bankruptcy is and you can also figure out what you need to do to help move the process along.
Chapter 11 is a very slow moving bankruptcy that is not going to go very quickly and is not going to be resolved in a month or two. With chapter 11 you can expect the process to last a few months all the way to a year or more. With this type of bankruptcy you do have to consider that you are working with another entity and not just yourself. You have to wait for responses from the creditors, if they want to change the terms you have to wait for that, and you do have to wait for the entire thing to be settled so that you can start paying back your debts and start working on resolving the bankruptcy as a whole.
Chapter 11 is a great way to restructure debt and to get back on track. With the help of an attorney you can get he process going, you can get your bankruptcy on track, and you can start working on repaying your debts and getting things squared away so that you can keep doing business and so that you can get ahead of your debt.
A great attorney can help you through the entire process and can help you get your debts restructured so that you can pay them and so that you can get back on track and not worrying about your debts.