Business Bankruptcy Chapter 11 in Pensacola
Although no one wants to go through bankruptcy, it is important that people are aware of their options so they can make the right decision in difficult circumstances. This is especially important for small business owners who are likely to depend on their businesses for their livelihood. Business bankruptcy Chapter 11 in Pensacola is an option that can provide debt relief for small businesses in financial distress. It allows the company to continue its operations and, ideally, stay afloat.
What Is Chapter 11?
Chapter 11 bankruptcy is also known as “reorganization.” The bankruptcy process allows a business to file for debt relief, but it is still permitted to continue to operate and conduct business after the reorganization. The most important aspect of Chapter 11 is the proposed plan for reorganization. This plan should include details about how creditors will be paid as well as the debtor’s business plan.
The bankruptcy court must approve the reorganization process. In some cases, the court might choose to assign a trustee as part of the process. This process reduces obligations and modifies payments so that the “debtor-in-possession” (or business owner) can regain profitability. Sometimes, the debtor might decide to sell assets or downsize his business to complete the reorganization plan.
How Does the Process Work?
Chapter 11 is only applicable to corporations, partnerships, and limited liability companies (LLC). Businesses that file for Chapter 11 must satisfy certain conditions, including the following: The debtor is not in an active business and has unsecured debts less than $2,566,000 or less, and there have been no creditors’ committees appointed.
When filing business bankruptcy chapter 11 In Pensacola, a creditor’s committee may be appointed to represent creditors. In a Chapter 11 case involving small businesses, however, the bankruptcy court will often order that no creditor’s panel be appointed.
A bankruptcy attorney is required for most businesses who are considering Chapter 11 bankruptcy. After it is confirmed that Chapter 11 is the best option, and all requirements are met by the attorney, an official petition with intent to file is submitted to the bankruptcy court of the state where the debtor does business.
A trustee can be appointed to the debtor to oversee the reorganization. A trustee may not be appointed in certain cases, such as when the bankruptcy court determines that the business is capable of performing the restructuring on its own, or if there is a well-crafted plan.
Automatic Stay
An automatic stay is placed after the bankruptcy petition is filed. This automatic stay protects the business against any repossessions or foreclosures, collection actions, and judgments that may occur during business bankruptcy chapter 11 In Pensacola. This allows both the trustee and the debtor to work together towards resolving financial problems in a more relaxed manner. The case will remain on hold for the duration of the stay.
Once the plan has been approved, bankruptcy proceedings are closed. The business must now follow the approved plan. Creditors can apply to the court for their own relief and may seek Chapter 7 liquidation if the plan isn’t adopted.
Why Choose Chapter 11?
Filing Chapter 11 allows the business to remain in operation, and thus recover profitability during bankruptcy proceedings. The business owner will not have to sell the business or liquidate assets. This is often a selling point for small-business owners who have put their heart and soul into their business.
Small business Chapter 11 bankruptcy in Pensacola often includes special provisions. A small business Chapter 11 case may be governed by a bankruptcy court that orders there cannot be a creditor’s panel.
Other provisions for small businesses include:
- Additional U.S. trustee oversight. Small business Chapter 11 cases may be subject to greater trustee oversight than traditional Chapter 11 cases.
- Plan deadline. Although other Chapter 11 proceedings do not have a set deadline, small business proceedings usually have a time limit of 300 days in which to present the reorganization plan.
- No disclosure declaration. Small business cases can be accelerated by the court waiving the disclosure statement requirement.
- The debtor has the exclusive right to propose a plan within 180 days. This reduces the likelihood of creditors filing other Chapter 11s.
- Additional filing requirements. Other documents that are commonly required for small business Chapter 11 filings include the most recent tax return of the debtor, balance sheet, statement on operation, and cash flow statement. A bankruptcy attorney can also provide information about these documents.
Choose the Right Bankruptcy Attorney
It can be difficult and complicated to file for Chapter 11 bankruptcy, especially if you are also managing and maintaining the business. It is crucial to work with a skilled bankruptcy attorney. The debtor must be given a fair evaluation and receive assistance throughout the process in order to ensure that their business is protected.
File for Bankruptcy Today
Filing for Chapter 11 business bankruptcy in Pensacola can be complex. It all depends on your particular situation. Your local bankruptcy lawyer will help you understand your situation and recommend the best way to move forward. There are many ways to make a new start. There are many options to help you rebuild your credit, get a second discharge or improve your financial position.
Contact Bruner Wright P.A.
Bruner Wright P.A. is the top-rated experienced bankruptcy lawyer in the Florida Panhandle. Our team has more than 40 years of experience helping people file Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 12 bankruptcy, and Chapter 13 bankruptcy. Our practice has been very successful in helping people discharge their debts. We offer a personal service that is comprehensive and thorough in all aspects of our industry.
Contact us today to schedule a consultation to find out if bankruptcy is the best option. A member of our team will review your case to help you make the right choice. Consumer bankruptcy is our focus. We want you to achieve financial stability with help from Pensacola chapter 11 business bankruptcy.