Chapter 11 Bankruptcy

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is also known as business bankruptcy. Chapter 11 filings intend to address matters relating to the restructure and reorganization of the business’ debts and assets. Large businesses usually choose Chapter 11 bankruptcy when seeking to reorganize their debt. Chapter 11 bankruptcy can offer the debtor the advantages of holding their assets and business operations, but under court supervision. This outcome can give the debtor the chance to better their business performance, and this can, in time, benefit their credit situation.

The sole right to propose a reorganization plan for debts under Chapter 11 belongs to the debtor, unless a small business debtor, during the first 120 days after filing for Chapter 11. The court can reduce or extend this period, but the time frame will not be lengthened over 18 months. After the exclusivity period has expired, creditors may file competing plans with the court. The plans will be voted on and if more than 1/2 the creditors in numbers of 2/3 the dollar amount votes for the plan, all other creditors are bound by the applicable plan. The decision of the bankruptcy judge settles disputed issues with the reorganization plan.

Who Can File for Chapter 11 Bankruptcy?

If individual debtors are ineligible for Chapter 7 or Chapter 13 bankruptcy, they can choose to file for Chapter 11. Chapter 11 is also available to small business owners, individuals, and partnerships. Most businesses must file a chapter 11 for bankruptcy relief due to the risks of closing the business’ doors and the complete liquidation of assets in a Chapter 7, along with the restriction of the Chapter 13 debt limits. In a Chapter 13, unsecured debt cannot be higher than $336,900 and secured debt cannot be higher than $1,010,650.00.

Contact King & Associates for a free consultation in the handling of your business debt.

Should I File for Chapter 11 Bankruptcy?

Business bankruptcy usually involves corporations and partnerships. However, any persons engaged in business, or individuals can file under Chapter 11. Chapter 11 filings are lengthy, lawyer intensive, and therefore can be very costly. Given considerations of cost, business organization, revenue, debts, and assets, filing for Chapter 11 bankruptcy may not be reasonable or necessary, and a personal bankruptcy may be a better way for you to manage the business debts.

If you are seeking to find the right bankruptcy for your financial matters, please make an appointment to talk with a knowledgeable bankruptcy attorney. We are here to help you make the right decision for your fresh start, giving careful consideration to all the circumstances of your specific case and needs.

Bob King has significant experience with Chapter 11 Bankruptcy cases. He has successfully represented clients in Chapter 11 throughout the state of Florida. Contact Bob King for a free initial consultation to get answers to your questions about the process to file Chapter 11 Bankruptcy. Contact him today at (941) 706-0632, or via email.

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