Your company could be doing well today and suddenly find itself in a dire financial situation. Things happen for no apparent reason. Your firm could be significantly impacted by the market’s erratic performance. And these disasters, which could destroy your company, are something for which you can never be fully prepared.
You can make every effort to keep your company from failing. If everything else falls, there is a workable approach that can help you save your company and give it a fresh start. A Chapter 11 bankruptcy lawyer in Auburn can present you with various choices specifically designed to handle your situation.
Find out how our California bankruptcy law firm can assist you in reviving your company by giving us a call right away.
Why do I need a Chapter 11 Bankruptcy Attorney in California?
Chapter 11 bankruptcy is distinct from other types of bankruptcy. These bankruptcy proceedings are subject to more difficult legal requirements. Not all bankruptcy lawyers possess the depth of knowledge and experience necessary to manage Chapter 11 bankruptcy. Your bankruptcy case will be affected by the legal counsel you select.
Bottomline Lawyers’ bankruptcy attorneys in Auburn have a demonstrated understanding of business and accounting principles in addition to bankruptcy law. Restructuring and reformation of failing firms are the focus of Chapter 11. You require an attorney who can give you legal advice on commercial and accounting matters in addition to legal issues. At Bottomline Lawyers, you can be confident that your case will be handled properly and proficiently by our Chapter 11 bankruptcy attorneys.
For a free consultation and to begin re-establishing your company, send us a message right away.
What is Chapter 11 Bankruptcy?
A type of bankruptcy known as Chapter 11 entails the restructuring of business assets as well as the reorganization of business debts. Businesses, partnerships, sole proprietorships, corporations, and occasionally, although infrequently, individuals use it. The total amount of debt is unlimited. It is thought to be the priciest and most challenging kind of bankruptcy.
In a Chapter 11 bankruptcy, the individual debtor must develop a reorganization plan to pay its creditors over time. Both the bankruptcy court and the creditors must approve the restructuring plan.
The suggested post-bankruptcy reorganization and restructuring strategy could include:
- Techniques for lowering costs
- Options for generating additional income
- Payments to creditors have been temporarily suspended
- New suggestions for profit
Chapter 11 bankruptcy is governed by a complicated United States bankruptcy code. The best way for your company to resolve its debt is to thoroughly examine and consider all available possibilities. The best course of action, if your company is already in a terrible condition and bankruptcy is your only option, is to obtain legal counsel from a Chapter 11 bankruptcy lawyer in Auburn who can carefully walk you through the procedure. Even though the litigation will be lengthy and difficult, it may give your company new hope.
What are the Frequently Asked Questions regarding Chapter 11 Bankruptcy?
Here are the most frequently asked questions from certain individuals who wish to file for Chapter 11 bankruptcy.
1.Who may make a Chapter 11 filing?
According to the law, anybody may petition under Chapter 11, with the exception of a governmental organization, an estate, a nonbusiness trust, a stockbroker, a commodity broker, an insurance provider, a bank, or a small business investment firm that is authorized by the SBA (Small Business Administration).
If a person has had a prior bankruptcy case dismissed for a specific reason within the previous three months, they are not eligible to petition under Chapter 11. Practically speaking, Chapter 11 is open to any company or individual who is able to pay the case’s expenses.
2.Why else would I choose to file for Chapter 11 bankruptcy over a different kind of bankruptcy?
Once debts prevent you from pursuing a Chapter 13 bankruptcy case and you’re ineligible to submit a Chapter 7 bankruptcy case, you can consider filing bankruptcy under a Chapter 11 case. This is because, under Chapter 11, unsecured debts are not subject to post-petition interest.
If your creditors want to assist you, you should also consider submitting a personal Chapter 11 case. Chapter 11 can be the best option for you once you have loans from numerous banks and the banks are accommodating and eager to help you.
3.Do you have to be financially stable to file for Chapter 11 bankruptcy?
Aside from the good faith requirement that perhaps the claim is filed primarily for purposes of reorganization, there aren’t any financial criteria for submitting a voluntary Chapter 11 case. An individual filing bankruptcy under Chapter 11 may be solvent or bankrupt, have assets that are greater than their liabilities by any amount (or vice versa), and have significant or negligible income.
A Chapter 11 case that is voluntary was initiated by the debtor. A Chapter 11 case filed against the debtor is known as an “involuntary Chapter 11 case.”
4.Why does Chapter 11 require so much time?
Prior to doing anything further, you must submit to the court a reorganization plan and disclosure statement, which must be authorized by the bankruptcy court. Once a group of creditors favors your restructuring plan, confirmation will be granted by the court.
The court should rule that your plan is only fair and equitable if your creditors reject it. A plan that is expensive and time-consuming must be acceptable to all creditors.
5.Are there any limitations on the size or type of firm that may qualify for Chapter 11?
No. Any size company can file for Chapter 11. It may be a partnership, a sole proprietorship, or a corporation.
6.A Chapter 11 Reorganization Plan: What Is It?
Your creditors with comparable claims are grouped in a reorganization plan, a legal instrument. There are various kinds of secured creditors. Unsecured creditors belong to a distinct category. Alimony, child support, administrative costs, and tax debts are examples of debts with priority creditors.
7.What does a Chapter 11 Disclosure Statement mean?
You must submit a disclosure statement to the court and provide copies to each of your creditors. It provides an overview of your financial situation, why you filed for Chapter 11 bankruptcy, and your proposed plan to get your financial issues under control. It also provides the financial and other information the creditors need to decide if they should approve your plan.
8. In a Chapter 11 bankruptcy, who may submit a reorganization plan?
You have the right under the law to submit the reorganization plan first, as the debtor. The time during which you have the sole or exclusive right to file your reorganization plan is referred to as the “confidentiality right” and may be altered by the Court. A creditor or other party with interest may put forth a plan after.
9. What is the United States Trustee’s mandate and role?
The United States Trustee is a representative of the US Department of Justice. They take the necessary steps to ensure that all reports and papers are filed, that all costs are paid, and that the case is completed on time.
All cases involving Chapter 11 bankruptcy and other types of bankruptcy are under the control of the United States Trustee. He can inform the bankruptcy judge whether the debtor complies with Chapter 11 bankruptcy requirements.
The US requires monthly reporting from you. a trustee’s statement of your earnings and outgoings during your Chapter 11 filing. The US trustee requires “every three months” payments from you while you are under Chapter 11.
10. Can a creditor request the appointment of a trustee on my behalf?
Any interested party may move to appoint a trustee to manage your Chapter 11 case if you have engaged in dishonest behavior. So that I can provide you with advice, especially if you run the risk of having a trustee appointed, it is crucial that you reveal your actions both before and during your bankruptcy.
11. What are my prospects of completing a Chapter 11 bankruptcy?
Personal Chapter 11 cases are challenging. Working with a bankruptcy attorney will significantly improve your prospects. A plan that can win the favor of your creditors would also improve your chances. Choosing a lawyer who is acquainted with bankruptcy judges, U.S. trustees, and the legal system generally will boost your chances of success.
12. How much would it cost for filing under Chapter 11 bankruptcy?
Cases involving personal Chapter 11 bankruptcy demand a lot of effort and care. In each Chapter 11 bankruptcy case, the bankruptcy court controls the fees. Moreover, a U.S. trustee’s opinion on charges is possible. Your attorney will negotiate a reasonable retainer and periodically request additional costs from the court.
13. What practical factors should each Chapter 11 bankruptcy case take into account?
Here are the things you might consider when filing for Chapter 11:
- Rent proceeds, other proceeds, or funds that have been committed to one of your creditors must be approved by the Bankruptcy Court in order to be used.
- The US trustee requires that you provide operating reports on a monthly basis.
- As your money will be governed by the Bankruptcy Court, you will have to create bank accounts called “debtor-in-possession” accounts.
- Due to the additional cash requirements of Chapter 11, you will need to budget very carefully.
- You might need to get funding from outside sources to finance your reorganization plan because certain creditors could request an advance on their claims. Consequently, you could need to arrange financing for your exit strategy, post-bankruptcy petition financing, or debtor-in-possession financing. Before filing for Chapter 11 bankruptcy, you should actually do this. You’ll also need to maintain your ties with your creditors since you’ll need them to care about your ability to pay your bills.
Contact our Best Auburn Bankruptcy Attorney Now!
There is yet a way out if you find yourself in a situation where everything you have worked so hard for has fallen apart and you are dealing with astronomical debts and creditor harassment. By declaring bankruptcy under Chapter 11 in Auburn, financially challenged companies can get help and a fresh start.
Don’t allow your company to crumble and be taken away before looking into all your choices. A Chapter 11 bankruptcy filing is a practical solution for dealing with money issues and getting your life back on track. Our Auburn Chapter 11 bankruptcy lawyer at Bottomline Lawyers’s law office will assist you if you are unsure how to proceed and have several inquiries concerning the procedures, requirements, and everything in between.
Instead of closing your business, pick up the phone and call us right away! Let’s work together to revive your company and restore its former splendor!