Chapter 11 bankruptcy can also be known as “reorganization bankruptcy” or “business bankruptcy,” because it is primarily for businesses, such as sole proprietorships and partnerships. However, filing bankruptcy chapter 11 in Florida can also be used by individuals whose assets are too big to qualify for Chapter 7 or Chapter 13.
Chapter 11 bankruptcy is a restructuring of assets that often results in a repayment plan for debts similar to Chapter 13. Chapter 11 bankruptcy is different because you retain control of assets and do not lose control to a trustee. You can continue to run the business even after you file bankruptcy with a Jacksonville chapter 11 lawyer.
How Chapter 11 Bankruptcy Works
- Chapter 11 may be voluntary or involuntary
- You can file voluntary by yourself
- Involuntary filing is when a creditor or group of creditors petition the court to declare you bankrupt.
- A voluntary Chapter 11 filing is similar to any bankruptcy filing. The debtor must usually complete pre-bankruptcy counseling within 180 days of the filing date.
- You must submit a formalized copy of any repayment plan you have created during credit counseling.
- Two fees are charged by the court and must be paid before any filing can be made.
- A filing fee may be divided into up to 4 installments. The final installment must be received no later than 120 days after the filing date.
- A miscellaneous administration fee can be filed in the same installments
- Failure to pay fees on time can result in the dismissal of your case
- Chapter 11 is a common chapter in which no trustee is appointed. The Chapter 11 trustee is usually not appointed in most cases. Instead, the debtor continues to be the “debt-in-possession” (DIP).
- In rare cases, a trustee can be appointed if there is evidence that fraud, dishonesty, or gross mismanagement has been proven.
- The DIP (or trustee), then usually files a written disclosure and plan of restructuring. This document outlines the steps taken to resolve each creditor’s claim.
- You have 120 days from the date of filing to submit a plan for reorganization.
- The filer has 180 days in which to convince creditors to accept the plan.
- Creditors who do not receive the full amount owed for existing debts can vote to accept or reject the plan.
- The court approves the disclosure statement and counts the votes. Finally, the court holds an acceptance hearing to confirm the plan’s acceptance.
- If so, existing debts will be discharged and the filer will have to repay creditors according to the reorganization plan.
- The completion of Chapter 11 can take from several months to six years depending on how complex the filing is.
Who Can File For Chapter 11 Bankruptcy?
Chapter 11 For A Corporation
The personal assets of stockholders who are filing bankruptcy chapter 11 in Florida for a business are not at risk of liquidation if the business files Chapter 11. This means that only the assets of the business will be considered in the chapter 11 corporate bankruptcy reorganization process.
Chapter 11 Small Business
When filing bankruptcy chapter 11 in Florida, small businesses can be granted special dispensations. Small businesses are defined as those that have less than $2,490.925 of creditor claims.
These are just a few of the differences that you can expect in a Chapter 11 case involving a small business.
- A court could order that no creditor’s panel be formed. This committee represents creditors in the reorganization process.
- A court may waive the requirement to file a disclosure declaration, which can greatly expedite the filing process.
- The “exclusive” period for filing a reorganization plan is extended to 120 to 180 days.
- Additional filing statements may be required for small business bankruptcy chapter 11 cases.
Chapter 11 Partnership
A business partnership usually means that the business assets are separate from the personal assets of the partners. Personal assets can be liquidated if the partners file bankruptcy protection.
Chapter 11 Sole Proprietorship
This means that the business assets are not separate from the owner’s. Your assets could be subject to liquidation in order to settle the creditor’s claims.
Chapter 11 Individual And Joint Filing
If personal assets are too large to file for Chapter 7 and Chapter 13, filing bankruptcy chapter 11 in Florida is the best option for spouses or individuals. The maximum unsecured debt is $419,275 and the maximum secured debt amount is $1,257.850. This is adjusted every three years. A couple of filing for Chapter 11 together will only be charged one filing fee and one administrative charge.
Contact Bruner Wright P.A.
Bruner Wright P.A. is a top-rated experienced law firm servicing the North Florida and the South Georgia area. Our practice has been very successful in helping people discharge their debts and handle both bankruptcy and foreclosure. We offer a personal service that is comprehensive and thorough in all aspects of our industry. We are responsive to the needs of our clients.
Our Service Areas
- Tallahassee Fl
- Douglas Ga
- Brunswick Ga
- Augusta Ga
- South Georgia
- The Florida Panhandle
Contact us today to schedule a consultation to speak to a bankruptcy attorney about filing bankruptcy chapter 11 in Florida. A member of our team will review your case to help you make the right choice. We are focused on personal chapter 7 bankruptcy, chapter 13 bankruptcy foreclosure, and business bankruptcy chapter 11. We want you to achieve financial stability.