Los Angeles Chapter 11 Bankruptcy Attorneys
Available When You Need to Reach UsThe idea of filing for bankruptcy might seem like a terrifying option, but that is simply because many people do not really understand the consequences of this decision. In reality, when you have a mountain of debt looming over your head, bankruptcy offers a fresh start, a chance to make things right again. Not all bankruptcy plans are the same, however. While many people associate bankruptcy with creditors coming and seizing all your property and possessions, different bankruptcy plans offer you the ability to simply reorganize and manage your debt options in a more feasible manner.
Chapter 11 is a great option for businesses (and in some cases individuals) trying to avoid liquidation, and instead, simply gain time in extending their payment plans or dividing payments into smaller portions. While the benefits of this plan are tremendous, it can be challenging to navigate through the application process itself without the support of our knowledgeable Chapter 11 Bankruptcy lawyers in Los Angeles. You can depend on The Turoci Bankruptcy Firm to get you through the complex application with ease and clarity.
Call us today at 888-332-8362 for a free, no-obligation consultation regarding all your Chapter 11 bankruptcy questions.
What Is Chapter 11 Bankruptcy?It can be difficult to distinguish different chapters of bankruptcy sometimes since many of them use similar language and terminology. However, Chapter 11 is distinct from the other chapters in the bankruptcy code because it allows debtors to maintain more freedom and independent control over their possessions.
Unlike in other cases, where debtors may have the entirety or majority of their property and possessions taken over by creditors, Chapter 11 actually allows debtors to hold onto most of their assets. All they have to do is reorganize the obligations they are paying back into more manageable portions. Sometimes this can be done by selling a few assets just to return down payments, but it can also be accomplished through the means of actually restructuring the current debts and their timelines.
SubChapter 5In February 2020, the government established SubChapter 5, alternatively known as the Small Business Reorganization Act (SBRA). This update was a crucial addition to the Bankruptcy Code since it now made the Chapter 11 filing process much more conducive and simple for small business owners, as well as individual debtors.
The benefit of SubChapter 5 is that it greatly diminishes costs involved, since small business owners and individuals cannot afford to pay as much as large corporations, and it also speeds up the process for bankruptcy. Our firm was the first in the state to adopt SubChapter 5, and the third in the entire country, so our attorneys are especially well-versed in SBRA.
Chapter 11 Bankruptcy ProcessFiling for Chapter 11 bankruptcy is similar to other types of bankruptcy, except that it involves more complex planning to restructure your debts. If you filing for Chapter 11 as an individual, you are required to complete a credit counseling course before you can submit your application.
The Chapter 11 process typically looks like:
- File Petition / Automatic Stay - You must file a bankruptcy petition that includes all of your business' financial information, such as your assets, debts, expenses, and income. Once your petition is filed, the court will issue an automatic stay that will temporarily stop creditors from pursuing your debts.
- Meeting with Creditors - You will then meet with creditors and the trustee to discuss and answer questions about your finances and operations.
- Reorganization Plan Proposal - You must propose a reorganization plan that outlines how your business will be restructured and how debts will be repaid or discharged.
- Confirmation Hearing - Creditors will review your plan and vote on whether to approve it. If a creditor does not approve, you can negotiate with the creditor and come to an agreement. If both parties cannot come to an agreement, a judge will make a decision.
- Payments Under Plan - Once a judge approves of the reorganization plan, you can start making payments. During the entire process, your business can still continue to operate.
Chapter 11 FAQsAre there restrictions on which business can file Chapter 11?
Businesses both large and small can file for Chapter 11, including limited liability companies, partnerships, and corporations. In some cases, even individuals may qualify for Chapter 11.
What is a cram down?
The term "cram down" in Chapter 11 refers to the bankruptcy court forcing a plan onto creditors against their will, as long as the plan meets the requirements of the court.
How long does a Chapter 11 case take?
There is no limit to how long a Chapter 11 case can last. The timeline and duration of a Chapter 11 can vary depending on the complexity of the case. Some cases can be completed and resolved within a few month, while more complicated Chapter 11s can take years to complete.
When should a business decide to file Chapter 11? It is always a good idea to discuss your situation with a bankruptcy attorney to help you decide whether or not Chapter 11 is the right path for your business. Although Chapter 11 can be complex and costly, it can provide some businesses with an effective solution to their financial troubles.
What Are the Benefits of Chapter 11 Bankruptcy?There are numerous advantages that Chapter 11 has over many other payment plans.
Some of the greatest benefits include:
- More independence in reorganizing your debts in smaller payments each month
- The ability to keep your business up and running while you pay your creditors, allowing you to still make profits
- You do not lose the network of your clientele base, and your company’s reputation remains strong
- High-interest loans can now be lowered
- Automatic stays are immediately set to stop creditors from harassing you or trying to collect debts
- Complex and stressful lawsuits, foreclosures, and levies can now be avoided
To learn more about your eligibility and the process, contact a seasoned attorney to help you navigate the entire application process. This is why you can turn to The Turoci Bankruptcy Firm, since our experienced Chapter 11 bankruptcy attorneys in Los Angeles are equipped with the right knowledge and strategies to aid you.
Contact us now at 888-332-8362 for a free, same-day appointment to check your eligibility for Chapter 11.