Citrus Heights, CA Chapter 11 Bankruptcy Attorney
Chapter 11 bankruptcy provides for the reorganization of a business’ debt into a more manageable form. However, it is also possible for individuals and other parties to use Chapter 11. Before you decide to use Chapter 11 to restructure your finances or the finances of your company, you should be certain that this type of bankruptcy is appropriate for you. If you or a family member is considering filing for bankruptcy, you should consult with an experienced Citrus Heights bankruptcy attorney.
The Bankruptcy Group, P.C. understands the difficulty involved in filing for bankruptcy, and we are here to help you streamline the process. Our firm will provide you with the unique legal representation that you need to successfully file for bankruptcy. To schedule a free legal consultation, call The Bankruptcy Group, P.C. at 1-800 920-5351, or contact us online.
Benefits of Chapter 11 Bankruptcy
The thought of filing for bankruptcy can be frightening. However, there are a variety of benefits that you can reap from filing Chapter 11 bankruptcy. As mentioned, it is possible for an individual and a business to file for Chapter 11. However, individuals typically only file for Chapter 11 to assist with real estate investment debt or unsecured debt that may not be discharged by using Chapter 13 bankruptcy. It is important to note that if you file Chapter 11 bankruptcy for your business, you cannot use this as an opportunity to reorganize your personal debts.
One of the primary benefits of Chapter 11 bankruptcy is the automatic stay that is automatically provided after filing the petition. An automatic stay is a grace period where a debtor’s financial obligations are temporarily suspended. This means that a creditor cannot pursue any debt that was accrued before the debtor filed for bankruptcy whether it involves foreclosure, a court judgment, or another financial issue. The purpose of an automatic stay is to provide a debtor ample time to negotiate a reorganization plan to deal with their finances.
There are some legal proceedings that an automatic stay cannot affect:
- Criminal proceedings
- Proceedings for child custody or visitation
- Marriage dissolution, unless the division of property is being decided
- Proceedings to establish paternity
Chapter 11 also has other benefits for business owners. For example, you may be permitted to keep the property that you need to run your business. You also may sell certain assets that you do not need or that your financial situation cannot support. Once your restructured financial plan is approved, you also may be able to discharge a portion of the debt that you will not be able to pay in full.
To learn more about the benefits of Chapter 11 bankruptcy, you should speak with an experienced California bankruptcy lawyer.
Chapter 11 Reorganization Plan
The ability to develop a reorganization plan to handle your business debt is another benefit of Chapter 11 bankruptcy. A reorganization plan has to be filed within 120 days after filing for Chapter 11. The debtor must provide their creditors and the court with a plan to repay financial obligations. There are multiple categories of creditors that must be addressed:
- Secured creditors whose debt is tied to collateral
- Priority unsecured creditors who possess debt that is not secured by collateral
- Unsecured creditors who are paid after priority creditors and who also do not possess collateral
- Equity security creditors that may hold a shareholder interest or another form of equity security
Creditors who will not receive the full value of their claim have the opportunity to vote on the plan presented by the debtor. Once certain creditors cast their vote, the court will approve or deny the reorganization plan. If the court approves the plan, certain debts will be discharged immediately as opposed to being discharged at the end of the repayment plan like other forms of bankruptcy.
There are multiple reasons why a reorganization plan is denied. For example, if the plan only provides for the best interests of the debtor and not the creditors, the court may not confirm the plan. Additionally, if the court believes that the restructured plan you created is too ambitious, they may not support its implementation. For example, if you create a plan to repay all creditors within two years, this may not seem feasible.
Citrus Heights Bankruptcy Lawyers Offering Free Consultations
If you need assistance reorganizing your debts, you should contact an experienced Citrus Heights Chapter 11 lawyer. The dedicated legal team at The Bankruptcy Group, P.C. have extensive experience handling a variety of bankruptcy cases. We have intimate knowledge of multiple types of bankruptcy, and we can help you determine which type is appropriate for your circumstances. To schedule a free legal consultation to discuss your bankruptcy options, call The Bankruptcy Group, P.C. at 1-800 920-5351, or contact us online.