Attention Small Business Owners – Act Now to Understand the Impact of the CARES ACT and Changes to Chapter 11 of the Bankruptcy Code
BANKRUPTCY – CHAPTER 11
Chapter 11 Bankruptcy can be filed by both individuals and businesses to restructure debt through a reorganization plan or liquidation of assets. For individuals who are overwhelmed with debt but have non-exempt assets which they want to retain, Chapter 11 may be the right option. Similarly, for businesses, Chapter 11 is a very important option as it can allow a business to continue normal operations under the supervision of the Bankruptcy court while at the same time negotiating new terms with its pre-bankruptcy creditors. Used correctly, Chapter 11 provides individuals and companies the time they need to recover from their dire economic position.
Eligibility & Criteria
A Chapter 11 Bankruptcy is a complex proceeding which involves many different professionals. However, if used correctly, it can breathe new life into a business or an individual with overwhelming debt. Once a Chapter 11 Bankruptcy is filed, the following are some of the events that will take place:
- Creditors are temporarily prohibited from taking any action against the individual or business
- The debtor will submit a Plan, which upon confirmation becomes a contract between the debtor and creditor to redefine how financial obligations will be met, including recommendations and implementation of ways to reduce expense and free up assets
The Complexity of Chapter 11
Chapter 11 bankruptcies can often be complicated and require the guidance of experienced attorneys for both individuals and businesses. The top reasons for filing Chapter 11 Bankruptcy include:
- Its ability to offer a viable option if an individual or business does not want to liquidate ALL assets in a Chapter 7 Bankruptcy
- An allowance for an individual or business with too much debt to qualify for a reorganization under Chapter 13
- An option for cases in which debt exceeds set standards for secured and unsecured balances
- A possible reduction of interest rates and extension of repayment terms
- A preference for a business to continue to operate, albeit with supervision of the Bankruptcy court
At CRL Law Group, our Coral Gables-based attorneys are well-versed in both personal and business bankruptcies, and offer a full array of services in Miami-Dade, Broward, and Palm Beach counties, and other areas throughout Florida. For a comprehensive review of your unique situation, contact us at (786) 332-6787.
Representation of Creditors
As a Creditor, our firm’s services can help protect your rights in a consumer or business bankruptcy, which can include filing proofs of claim, objecting to plans of reorganization, filing motions for relief from the automatic stay, settling priority disputes with other creditors or liquidating collateral. Our firm has extensive experience protecting creditors’ rights in Bankruptcy.