Filing Bankruptcy Chapter 11 In Florida

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 of a trustee. You can continue to run the business even after you file bankruptcy with a Jacksonville Chapter 11 lawyer.

 

How to File for Chapter 11 Bankruptcy

Chapter 11 bankruptcy shares many similarities with Chapter 13 bankruptcy, but it differs in a few key aspects. Unlike Chapter 13, there is no debt limit for Chapter 11, making it more suitable for businesses. However, Chapter 11 bankruptcy is also available to individuals. In this type of bankruptcy, individuals or businesses negotiate with lenders to secure debtor-in-possession financing before filing the bankruptcy petition. Essentially, they seek the court’s permission to continue operating as a debtor in possession, enabling them to restructure and stabilize their financial affairs. Additionally, it is crucial to settle debts legally and fairly.

For individuals, it is mandatory to undergo credit counseling at least 180 days before filing the bankruptcy petition. The purpose of credit counseling is to guide in making well-informed and wise financial decisions, thereby minimizing the likelihood of needing to file for bankruptcy again.

When filing for Chapter 11 bankruptcy in Ocala, your attorney will represent you at the initial hearing and submit your bankruptcy petition to the court, commencing the legal process. The petition must include a list of creditors, and the filing fee is required. Once you have filed for Chapter 11 bankruptcy, creditors are prohibited from contacting you directly. It is advisable to attend the hearing with your lawyer, where various motions related to your activities will be discussed and considered by the court. These motions may involve debtor-in-possession financing or the appointment of legal counsel.

In summary, Chapter 11 bankruptcy offers both businesses and individuals the opportunity to restructure their finances with the assistance of the court. By engaging in negotiations with lenders, obtaining necessary financing, and fulfilling legal requirements, debtors can work towards resolving their financial difficulties and achieving a fresh start.

 

Please Include the Following in Your Petition

  • Schedules of assets and liabilities
  • Current income and expenditures schedule
  • Statement of financial affairs
  • Schedule of executory contracts and unexpired leases

If you are a married couple or an individual, there are some additional requirements:

  • A certificate of credit counseling, along with a copy of any debt repayment plan formulated during the counseling session.
  • Proof of payment received from the employer, if applicable, within the 60 days preceding the filing of the petition.
  • A statement of monthly net income and any expected changes in expenses or income.
  • Documentation demonstrating the debtor’s interest in federal or state-qualified education and tuition accounts.

Couples have the option to file either a joint petition or an individual one when it comes to Chapter 11 bankruptcy. It is important to note that Chapter 11 bankruptcy can be a complex matter. However, by working with a lawyer from The Law Offices of Bruner Wright, P.A., the process can be made easier and more manageable.

Bruner Wright, P.A. provides expert legal advice from qualified Chapter 11 bankruptcy attorneys. If you are ready to make an informed decision regarding Chapter 11 bankruptcy, we are pleased to offer a free consultation. To begin the process, please give us a call at 850.385.0342 for our Tallahassee office and 904.432.1200 for our Jacksonville office.

 

How Chapter 11 Bankruptcy Works

  1. Chapter 11 may be voluntary or involuntary
    • You can file voluntarily by yourself
    • Involuntary filing is when a creditor or group of creditors petition the court to declare you bankrupt.
  2. 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.
  3. 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
  4. 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.
  5. 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.
  6. The court approves the disclosure statement and counts the votes. Finally, the court holds an acceptance hearing to confirm the plan’s acceptance.
  7. If so, existing debts will be discharged and the filer will have to repay creditors according to the reorganization plan.
  8. 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 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 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 for 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 filing for Chapter 11 together will only be charged one filing fee and one administrative charge.

 

Chapter 11 Bankruptcy FAQs

Is Chapter 11 Bankruptcy Only for Businesses?

Individuals can file for Chapter 11 bankruptcy. However, other types of bankruptcy, such as Chapter 7 and Chapter 13, are generally more appropriate for individuals.

Is Chapter 11 the Only Type of Bankruptcy Allowed for Businesses?

Yes, businesses have the option to file for Chapter 7 bankruptcy as well. However, it’s important to note that businesses are not eligible to file for Chapter 13 bankruptcy.

What Is Chapter 11 Bankruptcy?

In Chapter 11, a company engages in negotiations with its creditors and other stakeholders to develop a Chapter 11 plan. This plan allows businesses to make modifications to existing contracts and loan agreements, thereby reducing the amount owed and extending repayment periods.

Do You Have to Close the Business When Filing Chapter 11?

Chapter 11 provides businesses with an opportunity to restructure their debts and modify contracts. Importantly, one of the advantages of Chapter 11 bankruptcy is that a business is not obligated to cease its operations as a condition of filing.

 

Contact Bruner Wright P.A.

Bruner Wright P.A. is a top-rated experienced law firm servicing 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.

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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.