Auburn Chapter 11 Bankruptcy: What You Need To Know

Bankruptcy Attorney in Auburn, California

Your business can be thriving well today and in a blink be in a severe financial crisis. Circumstances are unpredictable. The market performance can be unstable, which can cause a big impact on your business. And you can never be prepared for these tragedies that could drag your business down.

You can try all means to save your business from falling. But if all else fails, there’s an effective solution that can help you save your business and give it a new beginning. An experienced Chapter 11 bankruptcy attorney in Auburn can offer you various tailored-fit solutions that could address your situation. 

Call us today and learn how our law firm can help you bring your business back to life!

Why do I need a Bankruptcy Lawyer in California?

Chapter 11 bankruptcy is not your ordinary bankruptcy. The legal procedures for this type of bankruptcy are more complex and complicated. Not all bankruptcy attorneys are equipped with substantial knowledge and experience to handle Chapter 11 bankruptcy. How you choose your legal representative will have an impact on your bankruptcy case.

The Auburn Chapter 11 bankruptcy attorneys at Bottomline Lawyers are proven to possess not only knowledge of bankruptcy law but also accounting and business. Chapter 11 deals with the reorganization and restructuring of fallen businesses. You need a credible lawyer who can provide you with not only legal advice but also business and accounting guidance. Our reliable and skilled attorneys at Bottomline Lawyers can assure you that we can handle your case effectively and efficiently.  

Send us a message now for a free consultation and let’s start rebuilding your business

What it Means to File Bankruptcy Without a Lawyer?

In this video, Attorney Richard Hall talked about the consequences that come after filing bankruptcy without the assistance and legal advice of a reliable bankruptcy attorney.

Chapter 11 Bankruptcy

If you are in a situation where everything that you worked hard for has crumbled down, and you are struggling with mountain-high debts and creditor harassment, there’s still a way out. Financially troubled businesses can find relief and achieve a fresh start by filing for Chapter 11 bankruptcy in Auburn.  Do not let your business fall apart and be taken away from you without exploring all options. Chapter 11 bankruptcy is a viable way of facing your financial problems and getting back on track. If you are confused about how to do it and you have plenty of questions about the processes, the requirements, and everything in between, our capable Auburn Chapter 11 bankruptcy attorney at Bottomline Lawyers law office can handle it for you.   Instead of closing the doors of your business, get that phone and dial our number now! Together, let’s recover your business and bring back its glory! Chapter 11 is a type of bankruptcy that involves the reorganization of business debts and restructuring of business assets. It is often used by corporations, partnerships, small businesses, sole proprietorships, and even though rarely, individuals. It has no limit on the amount of debt. it is considered the most expensive and complicated type of bankruptcy.

In a Chapter 11 bankruptcy, the debtor must create a reorganizational plan to pay its creditors over time. The reorganizational plan must be approved by the bankruptcy court and the creditors. It must also satisfy legal requirements as indicated in the bankruptcy law. If the terms of the reorganizational plan were followed and fulfilled in good faith, the remaining debts of the corporation will be discharged. In addition, the corporation can also benefit from reduced interest and monthly payments. 

The proposed reorganizational and restructuring plan post-bankruptcy may include:

  • Strategies to reduce costs
  • Options for new sources of income
  • Temporarily suspension of payment to creditors
  • New profitability ideas 

The bankruptcy code that governs Chapter 11 bankruptcy is complex. It is crucial to thoroughly analyze and explore all possible options for your business to solve its debt. But if your business is already in a dire situation and bankruptcy is your best solution, seek legal advice from a competent Chapter 11 bankruptcy attorney in Auburn to guide you carefully on the process. It will be a long and complicated case but can provide your business with new hope.

Auburn Chapter 11 Bankruptcy Process

  1. Chapter 11 bankruptcy case starts with the filing of application forms with the bankruptcy court. A bankruptcy case may either be voluntary (filed by the debtor) or involuntary (filed by the creditors). Filing for bankruptcy also comes with a corresponding fee. After submission of your bankruptcy case, the following takes effect. 
  • Automatic stay – An automatic stay goes into effect immediately after the bankruptcy petition is filed. This prohibits creditors from collecting payments from the debtor. 
  • Debtor in possession – Chapter 11 does not usually appoint a trustee most of the time, unlike Chapter 7 bankruptcy and Chapter 13 bankruptcy. The debtor automatically assumes the “debtor in possession” role and continues to manage and operate the business. The debtor in possession also maintains control of all its assets while it undergoes reorganization.

The appointment of a trustee in Chapter 11 bankruptcy only happens in small cases.

  • Avoidable transfers – The debtor in possession/trustee has avoiding powers to undo the transfer of properties or money within 90 days before the filing of the bankruptcy case. It can also be used to undo payments made to favored creditors before filing. 
  1. Debtors need to submit disclosure documentation to the bankruptcy court which includes:
  • list of assets and liabilities
  • schedule of current income and expenditures
  • schedule of relevant contracts and unexpired leases
  • statement of financial transactions

If the debtor is an individual or married couple, they need to submit the following additional paperwork:

  • certificate of credit counseling completion
  • debt repayment/management plan created through credit counseling
  • proof of payment from employers (received 60 days before filing)
  • monthly net income statement
  • any anticipated increase in income or expenses after filing
  • record of any interest the debtor has in the federal or state qualified education or tuition accounts
  1. The bankruptcy court clerk sends a notice of the filing of the petition to all creditors.
  1. The bankruptcy court will assign when the proof of claim should be filed. It is usually included in the notice to the creditors. Proof of claims must be filed for claims that the debtor failed to list in the debtor’s schedule of assets and liabilities. 

It is the creditors’ responsibility to check whether the claims are listed correctly and if there are changes needed. 

  1. The debtor in possession has 120 days to file the plan of reorganization. The timeframe can be reduced or extended by the court but longer than 18 months. If the debtor in possession did not submit a reorganization plan after the exclusivity period, the creditors or the case trustee may file a competing plan. 
  1. The disclosure statement submitted by the debtor in possession should be approved by the bankruptcy court. 
  1. After approving the disclosure statement, the reorganization plan will be considered by the creditors. The bankruptcy court will mail all the creditors the following paperwork for voting:
  • reorganization plan approved by the court 
  • approved disclosure statement
  • acceptances and rejections notification period
  • notice of the time fixed for filing objections
  • hearing on confirmation schedule
  • ballot for accepting or rejecting the reorganization plan
  • Other information as the court may direct
  1. The bankruptcy law mandates the court to conduct a hearing on confirmation of the reorganization plan after the notification period has passed. If there are no objections to the reorganization plan, the court must proceed with evaluating the bankruptcy case. 
  1. After the confirmation of the reorganization plan, the debtor must follow the provisions indicated in the plan, especially the payment schedule. The reorganization plan can be modified at any time after the court confirmation. The debtor needs to ensure to follow the bankruptcy code and seek court approval for any amendments in the plan. 
  1. Once the debtor has completed the reorganizational plan in good faith, the bankruptcy court will issue the final decision to close the case.

The United States Bankruptcy Code is full of complexities, special rules, and exceptions depending on certain circumstances. It can be financially and legally challenging. It can be dragged longer than expected, especially if there are rules and regulations that you failed to observe. To guarantee a cost-efficient, smooth and straightforward process, it’s highly recommended to consult with a knowledgeable Chapter 11 bankruptcy attorney in Auburn.

Benefits and Disadvantages of Chapter 11 Bankruptcy

Chapter 11 bankruptcy can help you recover your business. It can also help your business to start anew. It is an effective way of resolving your debt issues while your remain in control of your business. But Chapter 11 may not be the best fitting solution for all debtors. It has benefits and disadvantages which you need to evaluate carefully. 

A seasoned Chapter 11 bankruptcy attorney Auburn, California, can help determine whether this type of bankruptcy is for you. 

Auburn Chapter 11 Bankruptcy Benefits

  • Creditors stop collecting payments due to automatic stay
  • The business can continue to remain in operation, and it allows you to retain control of the business 
  • The business can avoid total liquidation 
  • You can borrow money on better terms (debtor-in-possession)
  • You can renegotiate some terms on certain debts including leases and other contracts 
  • You have more time to develop and submit new plans for another chance to redeem yourself and your business
  • The business can restructure and reorganize areas that are not working 
  • The business gets the opportunity to wipe out some debts and be able to emerge as a financially healthy business 

Auburn Chapter 11 Bankruptcy Disadvantages 

  • The business may be forced to sell some assets to raise money (subject to court approval)
  • Sole proprietors are not shielded from creditors asking for repayment 
  • Borrowing money and making other transactions/decisions need court approval
  • Time-consuming 
  • Costly process (attorney fee and other professional fees)
  • Chances of Chapter 11 bankruptcy failure can lead to forced liquidation of the business

Chapter 11 Bankruptcy Eligibility

There are no limitations or requirements on the amount of debt or income to qualify for Chapter 11 bankruptcy. It is available to any individuals, sole proprietorships, partnerships, corporations, joint ventures, and limited liability companies.

Creditors can also file for a Chapter 11 bankruptcy for an individual or a business. This case is called “involuntary bankruptcy.” Creditors request for the individual or business to go into bankruptcy if they think they will not be paid unless bankruptcy proceedings take place. 

If you require to reorganize and restructure your business or personal finances, you can consider filing for Chapter 11 bankruptcy. But before arriving at any decision, make sure to consult your most trusted Chapter 11 bankruptcy attorney in Auburn. Do not enter this process unprepared, dial our number now and let us help you gear up for this process. 

Can anyone file for Chapter 11 bankruptcy? 

NO! Although almost anyone can file for Chapter 11 bankruptcy, there are still individuals, companies, or businesses that are restricted. Who are they? 

  • Government agencies
  • Insurance companies
  • Estates
  • Banks
  • Non-business trusts
  • Commodity brokers or stockbrokers 
  • Small business administration (licensed investment companies)
  • OR anyone/business that has another bankruptcy case (Chapter 11, Chapter 7, or Chapter 13 bankruptcy) that has been dismissed in the past six months

Call our Reliable Auburn Bankruptcy Attorney Now!

If you are in a situation where everything that you worked hard for has crumbled down, and you are struggling with mountain-high debts and creditor harassment, there’s still a way out. Financially troubled businesses can find relief and achieve a fresh start by filing for Chapter 11 bankruptcy in Auburn.

Do not let your business fall apart and be taken away from you without exploring all options. Chapter 11 bankruptcy is a viable way of facing your financial problems and getting back on track. If you are confused about how to do it and you have plenty of questions about the processes, the requirements, and everything in between, our capable Auburn Chapter 11 bankruptcy attorney at Bottomline Lawyers law office can handle it for you. 

Instead of closing the doors of your business, get that phone and dial our number now! Together, let’s recover your business and bring back its glory!

BottomLine Lawyers

Facing Bankruptcy or other financial matters? We can help!

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Facing bankruptcy or other financial matters? We can help!