Wellington Chapter 11 Bankruptcy Attorney
Most of the time, when one talks about a Chapter 11 bankruptcy, one assumes they are speaking of a business. In many cases, this is accurate – but it is possible to file for Chapter 11 bankruptcy as an individual as well. Either way, a bankruptcy of this type can be difficult to navigate alone, so contacting a knowledgeable Wellington Chapter 11 bankruptcy attorney is generally a good idea.
Individuals Can File
Most individuals who file for bankruptcy tend to do so under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. However, both have limits on how much debt one is allowed to have before filing under that chapter. If one has more than $1,184,200 in secured debt or $394,725 in unsecured debt, one cannot file under Chapter 13, and if one does not qualify under the means test, one cannot file under Chapter 7. Chapter 11 may be an appropriate alternative depending on an individual debtor’s financial situation.
Chapter 11 may also be a good choice for an individual debtor if the specific nature of your debts is advantageous to restructuring under that chapter. For example, if many or all of your creditors are willing to work with you, Chapter 11 with its grouped creditors and disclosure statement can be a good idea since it sets out a concrete plan for repayments. If you have hostile creditors, or those who are not going to be likely to accept any proposed plan you come up with, you may be better served by filing under Chapter 7 if at all possible.
Businesses Are More Common
While individual debtors can and do use Chapter 11 to file, most bankruptcies under this particular code chapter come from businesses, especially corporations and limited liability corporations (LLCs), . This is especially true if the business owner wishes to continue, rather than simply closing up and liquidating assets – in many situations it is the only option if closing the doors is to be avoided. Chapter 11 reorganization for a business follows roughly the same process as it would for an individual – a disclosure statement and reorganization plan, advising creditors of the debtor’s current financial picture and plans to manage debts, is submitted to the court and to creditors, a majority of whom must vote in favor of the plan before it can go forward for each class.
Be advised that if you elect to keep your company open during your Chapter 11 proceeding, there are restrictions on certain actions that might come up during the normal course of business. Perhaps the most often seen is the prohibition on the use of cash collateral (for example, rent proceeds, in the case of a real estate developer or property owner) to further your business – if you do, you are technically using funds that your creditors have a prior claim upon, which is frowned upon absent specific permission to do so (which is generally only given in very rare cases).
Enlist A Knowledgeable Legal Professional For Your Chapter 11 Case
Chapter 11 bankruptcies are complex, regardless of whether one is filing for themselves or their business. Either way, consulting an attorney well versed in this type of law is a move that can help save you time and trouble. The business-minded Chapter 11 bankruptcy lawyers at Markarian & Hayes are happy to sit down with you and try to help work out a solid plan to move your case forward. Call our offices today to set up an initial consultation. We serve Wellington, Palm Beach Gardens, and Vero Beach.