Business Bankruptcy Chapter 11 in Tallahassee
While bankruptcy is not something anyone wants, it’s important to be aware of your options in order to make the best decision in difficult situations. This is particularly important for small business owners, who depend on their business for their income. Small businesses can get debt relief through business bankruptcy chapter 11 in Tallahassee. This allows the company to continue operations and, hopefully, stay afloat.
What Is Chapter 11?
Chapter 11 bankruptcy is also called “reorganization.” A business can file for debt relief through bankruptcy. However, it can still continue to run and operate its business after the reorganization. The plan for reorganization is the most important part of Chapter 11. The plan should detail how creditors will pay and the business plan of the debtor.
The bankruptcy court must approve any reorganization. Sometimes, the court may choose to assign a trustee in the course of the proceeding. This process reduces obligations and modifies payments so that the “debtor-in-possession” (or business owner) can regain profitability. Sometimes the debtor may decide to sell assets or downsize his company to finish the reorganization plan.
What Is the Process?
Chapter 11 applies only to corporations, partnerships, and limited liability companies (LLCs). Companies that file Chapter 11 must meet certain conditions: The debtor is not an active business, has unsecured debts of less than $2566,050, and creditors’ committees have not been appointed.
A creditor’s committee can be appointed to represent creditors when filing for business bankruptcy Chapter 11 in Tallahassee. A bankruptcy court may order that no creditor panel be appointed in a Chapter 11 case involving small businesses.
Businesses considering Chapter 11 bankruptcy will need a bankruptcy attorney. Once it has been confirmed that Chapter 11 is the best option and all requirements have been met, a petition with intent is filed at the bankruptcy court in the state where the debtor is located.
To oversee the restructuring, a trustee can be appointed for the debtor. In certain situations, a trustee cannot be appointed, such as when the bankruptcy judge determines that the company is capable of restructuring itself or if the plan is well-crafted.
After the bankruptcy petition has been filed, an automatic stay is put in place. The automatic stay protects the company from any repossessions, foreclosures, collection actions, or judgments that might occur during business bankruptcy chapter 11. This allows the trustee and debtor to work together in a more relaxed fashion toward solving financial problems. The case will be held for the duration of the stay.
After the plan is approved, bankruptcy proceedings can be closed. The business must follow the approved plan. If the plan is not adopted, creditors can file a petition with the court to seek relief.
Why Choose Chapter 11?
Chapter 11 allows the company to continue operating and recover its profitability during bankruptcy proceedings. The business owner won’t have to sell or liquidate the assets. Small business owners who put their heart and soul into their business are often able to sell it.
Small business bankruptcy Chapter 11 in Tallahassee often contains special provisions. A bankruptcy court may decide that a creditor’s committee cannot handle a small business Chapter 11 case.
Other provisions are available for small businesses:
- Additional U.S. trustee oversight for Chapter 11 small business cases could be subject to greater trustee oversight than traditional Chapter 11 cases.
- While other Chapter 11 proceedings don’t have a deadline, small business proceedings typically have a time limit to present the plan within 300 days.
- The court may waive the requirement for a disclosure declaration in small business cases.
- The debtor is the only one who can propose a plan within 180 calendar days. This decreases the chance of creditors filing Chapter 11s.
- Small business Chapter 11 filings may require additional documents such as the most recent tax return, balance sheet, statement of operation, and cash flow statement. These documents can be provided by a bankruptcy attorney.
Select the Right Bankruptcy Attorney
Filing for Chapter 11 bankruptcy can be complicated, especially if your business is being managed and maintained. A skilled bankruptcy attorney is essential. To ensure their business is protected, the debtor should be given a fair assessment and assistance throughout the process.
Apply for Bankruptcy Today
It may seem difficult to file for business bankruptcy Chapter 11 in Tallahassee. It all depends on your specific situation. A local bankruptcy lawyer can help you assess your situation and suggest the best course of action. There are many options to get a fresh start. There are many ways to improve your credit score, your financial situation, or get a second discharge.
Contact Bruner Wright P.A.
Bruner Wright is the most highly rated bankruptcy lawyer in Florida Panhandle. Our team has over 60 years of combined experience in helping people file for Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 12 bankruptcy, & Chapter 13 bankruptcy. Our firm has helped many people get rid of their debts. We provide a personalized service that covers all aspects of business bankruptcy Chapter 11 in Tallahassee.
Call us today for a consultation to determine if bankruptcy is the right option. To help you make the best decision, a member of our team will review and evaluate your case. Our focus is on consumer bankruptcy. We want financial stability for you.