What is Chapter 11 bankruptcy?
Chapter 11 for businesses and high-debt consumers
There are very few Chapter 11 bankruptcies in San Diego. In San Diego county these are many small businesses and extremely high debt consumers are not as often as you would think. If you think you are a Chapter 11 bankruptcy candidate come in and talk.
A Chapter 11 bankruptcy is a form of debt reorganization and payment that is approved and overseen by a court for companies and high debt consumers. Most individuals don’t need a Chapter 11. But, if the information you seek is at the beginning stages of research on the internet, it is easy to think you might need a Chapter 11 bankruptcy. Most people even though they own a business can be put into a Chapter 7 bankruptcy. The important thing is you get the right legal help.
Talk to an attorney. If your corporation is in trouble and needs bankruptcy, it must be represented by an attorney anyway. If you as an individual (not a corporation) are making ends meet and have a little bit of money left over, even a couple of hundred dollars, but yet you have over $1,030,000 in secured debt or $336,000 in unsecured debt, you cannot file Chapter 13. It’s going to be either 7 or 11. How do you know which chapter works for you, or for your company? Don’t expect to figure this out on a search engine. Get real legal advice from a competent attorney. Lots of times you can get answers to these questions for free.
Chapter 11 bankruptcy is for troubled companies that wish to continue operating, and for individuals who have more debt than allowed in Chapter 13. These “debtors” must prove to the court that the debtor is capable of generating revenue to eventually pay off part or all of its debts. Going with Chapter 11 makes it possible for a company to remain in operation, and hopefully become profitable in the future.
Chapter 11 bankruptcy makes it possible for the company or consumer to hold on to some current assets, especially those that are considered essential to the core operation of the business. If the court – and creditors – agrees with you that Chapter 11 is right, the court will approve a reorganization plan that allows the business to continue operations. Often creditors get to first vote on the “plan”.
Chapter 11 bankruptcies require a high level of legal expertise to successfully implement. Only a handful of bankruptcy lawyers does Chapter 11 bankruptcy cases in San Diego. If you think this is something you need to consider, call us for a Bankruptcy Option Assessment. One of our bankruptcy law firm’s sweet spot is those cases like business owners who might need bankruptcy. The more complex your case the better. Call us so you know where you stand.