Wayne County Chapter 11 Bankruptcy Lawyer
Details Regarding Chapter 11 Bankruptcy
Chapter 11 bankruptcy is meant for businesses that need help in a financial struggle. Unfortunately, even large, well-known companies go through hard times and may need an opportunity to restructure and create a new plan. This type of bankruptcy allows them to do so without having to shut down. Chapter 11 is not solely for large corporations, small business owners can also take advantage of this bankruptcy. When going through Chapter 11 bankruptcy, the court places a stay on any collections and judgments. This allows a business to create a realistic plan while being shielded from creditors during the process. If you are in need of some type of financial help or just time to reorganize, consider Chapter 11 bankruptcy. Feel free to contact a bankruptcy lawyer in Wayne County to discuss the option of bankruptcy and how it could help you.
How to File for Chapter 11 Bankruptcy
In order to file for this type of bankruptcy, you will need to file a petition in bankruptcy court. These are usually voluntary cases where a debtor seeks relief through bankruptcy. There are instances; however, where creditors can team up and file a Chapter 11 petition against a debtor. This type of bankruptcy can take a few months or even a few years depending on the specific circumstances. When going through the process, your will continue your business operations. If needed, the court can appoint a trustee to continue with the business operations for the debtor. Some situations where a trustee may be needed would be cases of fraud, incompetence, dishonesty or other mismanagement issues.
In Chapter 11 bankruptcy, the debtor will maintain the business, but they also lose control over decisions regarding the business. The bankruptcy court is in charge of approving all of the following:
- Selling assets
- Creating or breaking a lease of property
- Mortgage or financing arrangements
- Business operations
- Modifying or creating agreements involving the union, licensing or vendors
- Attorney and professional fees
Some see this loss of control as a disadvantage that causes them to refrain from filing for Chapter 11 bankruptcy. In actuality, this shift of control is oftentimes exactly what the debtor needs to get back on track and create a new plan. The court will take into consideration the input from creditors and then proceed in the way that they see fit. If you have questions about this loss of control or the process in general contact Bryant Logan Law Group, PLC at any time.
Reorganization Plans in Chapter 11 Bankruptcy
There is an "exclusivity period" wherein a debtor has the right to propose reorganization plans for their business. The length of the period varies by circumstance but generally it is around four months. After this period is expired, the creditors or other parties of interest can propose competing plans. This is not a common occurrence, if creditors are dissatisfied with the plan they usually just try to have it dismissed. The reorganization plan is one of the most beneficial aspects of a Chapter 11 bankruptcy. If you are struggling to keep your business afloat, this allows you to reorganize and restructure your financial affairs. This plan is an agreement between you and your creditors regarding how you will operate your business and keep up with your payment obligations in the future. With the plan, you generally will have reduced expenses in the future, it is rare that you will need to fully pay back your creditors right away. The four requirements for your plan are:
- It is feasible
- It has been proposed in good faith
- It is in the best interest of the creditors
- It is fair and equitable
The plain would be pointless if it is was not feasible, you need to be able to fulfill the plan. In order for it to be in the best interest of the creditors, there is a test. Generally, they need to be receiving as much payment as they would if your business was liquidated in a Chapter 7 bankruptcy. There is also a fair and equitable test that determines whether creditors are being paid an appropriate value in the appropriate amount of time.
Team up with a Chapter 11 Bankruptcy Attorney
Searching for a lawyer for your Chapter 11 bankruptcy in Wayne County? You need the top bankruptcy lawyer in Wayne County. Contact Bryant Logan Law Group, PLC to team up with over 50 years of combined experience in bankruptcy. We offer a
free case evaluation, call today and see how we can help you in your bankruptcy!