Debt Lawyer | What Is Chapter 11 Bankruptcy?
Debt Lawyer | Chapter 11 bankruptcy is an option for businesses of any size to deal with a heavy load of debt. It is also an option for individuals and people who do not qualify for Chapter 7 or Chapter 13 bankruptcy. It provides the opportunity for a business to reduce its expenses while finding new ways to turn a profit. While a Chapter 11 is in progress, the business is protected from its creditors.
Chapter 11 Filing Process
The business or individual files a petition with the United States Bankruptcy Court. Once the action begins, creditors must suspend all collection activities. During this time, the debtor must prepare a plan to reorganize finances and repay outstanding obligations.
Chapter 11 Reorganization
Unlike Chapter 7 liquidation, a Chapter 11 bankruptcy is about profitability. The debtor must negotiate terms to either repay obligations or get them partially discharged. This is an incentive for creditors to work with debtors since it is unlikely that Chapter 7 would bring better results. A good reorganization plan prioritizes debt where wages, back taxes and stockholders come first, followed by unsecured claims. The plan requires court approval and confirmation after creditors vote on it. If approved, all debt incurred before the confirmation date is discharged, and the debtor is then obligated to repay financial obligations as agreed to in the plan.
Any individual or business considering a Chapter 11 bankruptcy filing should seek legal counsel before moving ahead with a plan.
The decision to file bankruptcy is a crossroad in your life and should not be made without obtaining objective, considered advice from an expert. Choosing the right bankruptcy attorney in Bakersfield will eliminate the fatigue and worry that can come from the Bankruptcy filing process. You will be provided the right guidance and understanding of your rights, and your responsibilities, as a debtor filing Bankruptcy.
If you are considering filing Chapter 11 Bankruptcy in Bakersfield for your business, get advice sooner, rather than later. Call Max Gardner Today at 661-888-4335