Chapter 11 Bankruptcy Explained
A Chapter 11 bankruptcy is available to both businesses and individuals but is primarily utilized by businesses that are unable to pay their creditors. Since it is much more complicated compared to a Chapter 7 or Chapter 13 bankruptcy, it is rarely used by individuals unless they fail to qualify for a Chapter 7 or 13. If you’re considering bankruptcy, the attorneys at Rick Law can help you understand and explore your full list of options.
When Chapter 11 Is Most Appropriate
A party would file for Chapter 11 when the filer believes that the value of the business is greater than the amount that could be obtained if all property was given away or liquidated. It allows the filer to reorganize its debts so it can keep operating with the hope to get out of the jam and become financially profitable. Businesses could also file Chapter 7, but then all the assets are liquidated, with the proceeds going to pay creditors, making it impossible to keep the business running.
A Chapter 11 bankruptcy allows a business to recover its assets and repay part of its debts and discharge whatever is left over. It has the ability to rescale, restructure, and renegotiate operations and contracts/leases to get back to being profitable. It is often used by large businesses to help them stay active while repaying creditors.
Chapter 11 takes approximately four to 18 months to come up with a repayment plan.
Discuss Your Options In A Free Consultation
If you are interested in seeing if you qualify to file for bankruptcy, you should get in contact with an experienced bankruptcy attorney at Rick Law. Just call 610-850-9036 or message us online. We can help you avoid common mistakes made by many as they look to achieve financial freedom.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.