For certain people, Chapter 7 bankruptcy and Chapter 13 bankruptcy may not be realistic options. In other cases, Chapter 11 bankruptcy may simply provide the best way to accomplish a true reorganization of debt. Chapter 11 bankruptcy are generally for business that want to keep their operations open, but are struggling with crippling debt. For individuals, Chapter 11 is an possibility if your debt is too high, or you have real property that is significantly worth less than the value of the secured debt against the property. The Henshaw Law Office has handled many Chapter 11 bankruptcy cases for both individual and small businesses matters.
In Chapter 11 bankruptcies, the individual or business owner generally continues to manage their finances, and has control over any business affairs. The Bankruptcy Court may have to intervene in certain instances.
A Chapter 11 filing provides that those that file the bankruptcy (also called debtors-in-possesion) can restructure their business and debts. The purpose of Chapter 11 is to create a plan of reorganization that the Bankruptcy Court confirms. Creditors are sent ballots, and are allowed to vote on whether they want to accept the terms included in the plan of reorganization. Debtors filing in Chapter 11 cases are also protected from creditor action because of the standard automatic stay that occurs in other chapters of bankruptcy..
One of the biggest reasons recently for filing a Chapter 11 bankruptcy is to alter and reduce the amount of secured debt (property loans, vehicle loans, equipment loans, etc.). Through a Chapter 11 bankruptcy plan, Debtors can reduce the liability on such secured debt to the value of the underlying property.
Although very few of the bankruptcy cases filed under Chapter 11 result in a confirmed plan, we will work with you and your creditors to negotiate terms that the parties can comply with. We review each client’s case to determine if Chapter 11 is appropriate.
Should you have interest in or need to filing a Chapter 11 bankruptcy case, contact the Henshaw Law Office today at (916) 915-3072.