Folsom Chapter 11 Bankruptcy Attorney
Bankruptcy is not just for individuals with personal debt. It can also be utilized by businesses to help protect assets, permit for continued operation of the business during restructuring, and potentially pull a failing business back from the verge of insolvency. Though there are many different types of bankruptcy, most businesses file under Chapter 11, which is designed around long-term reorganization of debt. Chapter 11 also allows many debts to be discharged, or eliminated.
Chapter 11 bankruptcy has numerous benefits for the right company in the right situation at the right time. However, it is also the most complex form of bankruptcy. This makes it especially critical for business owners to be guided and represented by skilled and knowledgeable attorneys who possess substantial experience in assisting small and large companies with reorganization bankruptcy. To discuss whether Chapter 11 bankruptcy may be beneficial for your company in a free and confidential legal consultation, contact The Bankruptcy Group at (800) 920-5351.
How Does Chapter 11 Reorganization Bankruptcy Work in California?
There are four types of bankruptcy in California: Chapter 7 and Chapter 13, which are typically utilized by individual filers or married couples; Chapter 12, a highly uncommon form, as it is used exclusively by farmers and fishermen; and Chapter 11, which is generally used by corporations and limited liability companies.
Small businesses, such as family-owned businesses, may initially turn away from the complexity of the Chapter 11 process; but, with skilled and dedicated guidance from an experienced bankruptcy attorney, there is no need to be intimidated by the intricacies of a Chapter 11 case. Indeed, Chapter 11 may be the ideal financial strategy from which to approach the task of restructuring your small business.
For some businesses, Chapter 11 may be the only viable option. Because Chapter 13 is available only to individual filers, and filing for Chapter 7 will result in liquidation of assets and cessation of operations, Chapter 11 is generally the appropriate form of bankruptcy for corporations and limited liability companies. In some situations, a sole proprietor, or the partner in a partnership, may be able to file under Chapter 13 as an alternative. Our attorneys will review your company’s debts, assets, and financial objectives in careful detail to determine what sort of bankruptcy is most suited to helping you accomplish your goals.
What Happens to Business Debt in a Chapter 11 Case?
When a business files for Chapter 11 bankruptcy in Folsom or in other parts of California, the filing party must pay two fees: a $550 administrative fee, and a $1,167 fee for filing the case in court. Please be advised that these fees are subject to change.
Along with the necessary fees, the filer will also be required to submit to the court several documents, including the bankruptcy or “voluntary” petition, a written disclosure statement, and critically, a “reorganization plan” or “plan of reorganization” that gives Chapter 11 its nickname of “reorganization” bankruptcy.
This plan of reorganization must be approved by the court through which the case is proceeding, and serves as the case’s foundation, acting like a blueprint the filer must follow in order for the case to be discharged successfully. The plan of reorganization prioritizes the filer’s creditors depending on whether they are secured or unsecured, and in so doing, creates an organized system for making manageable repayments. This allows the business to stay in operation while the bankruptcy is in effect.
A Chapter 11 bankruptcy case may be dismissed if there are any problems with the case. For instance, the case could be dismissed if the court determines the filer committed fraud or otherwise failed to comply with the stringent and complex requirements of the Chapter 11 bankruptcy process. However, if the case proceeds successfully, the court will grant a discharge, which can cause various business debts to be discharged or eliminated.
Chapter 11 cases generally take several years to conclude completely. It is imperative that the filer continue to make timely payments in accordance with his or her reorganization plan throughout the duration of the bankruptcy.
Folsom Chapter 11 Bankruptcy Lawyers for Small Businesses, LLCs, and Corporations
When skillfully handled by an experienced Folsom Chapter 11 attorney, bankruptcy can make the difference between financial ruin and financial solvency, particularly for business owners who have long been struggling to emerge from beneath mountains of unmanageable debt. Contrary to the many myths and misconceptions about bankruptcy’s negative effects, the reality of the matter is that bankruptcy can be a very powerful, positive, and proactive financial tool and can be used to save your business from collapsing.
Your business deserves a fresh start for the new year. Seize control of your company’s financial future by consulting with a knowledgeable Chapter 11 bankruptcy attorney in California. To talk about how Chapter 11 may be able to help your business, contact The Bankruptcy Group at (800) 920-5351 or contact us online today.