If you are a business owner with a rising number of creditor claims and cannot rid yourself of tremendous debt, you may be considering filing for bankruptcy. A Chapter 11 bankruptcy action can be a viable option for sole proprietors, partnerships, and other business owners to keep operating while restructuring debt.
A Madison Chapter 11 business bankruptcy lawyer can help you understand your financial and legal options. Our experienced business bankruptcy attorneys can help you file the petition, create a reorganization plan to satisfy creditors, and represent your interests in bankruptcy court.
Business owners may be afraid that the only option for bankruptcy is to liquidate all assets and close the doors of the company. Chapter 11 bankruptcy allows business owners to reorganize assets and debts and implement a plan to repay creditors.
One of the key benefits of a Chapter 11 bankruptcy is that you can continue to control and operate your business while you work to discharge the outstanding debt. A debtor will not be forced to file for a Chapter 11 bankruptcy except when three or more creditors file a petition with the bankruptcy court.
A Chapter 11 bankruptcy can also allow the debtor to borrow additional capital for the business while on the plan of reorganization. This is why Chapter 11 bankruptcy is frequently used by partnerships, corporations, and limited liability companies. Depending on the details of the case and the extent of the debt involved, these bankruptcy proceedings can take anywhere from several months to a few years from start to finish.
When a company files for Chapter 11 bankruptcy, the stockholders’ personal assets are not at risk except for the value of stock investments. However, with a sole proprietor, both personal and business assets are involved. This is also true with certain partnerships filing for Chapter 11 bankruptcy.
Filing a Subchapter V may be a more cost-effective alternative for many small business owners and sole proprietors to reorganize debt while continuing to run the business. However, certain debt limits for Subchapter V eligibility apply. A Madison Chapter 11 business bankruptcy lawyer with experience in Subchapter V cases can help you determine the best path forward.
A Chapter 11 bankruptcy revolves around a reorganization plan. The process involves several steps, including a proposal to the creditors to reorganize the debt and a meeting with creditors. During this process, creditors may also request to modify the proposed plan of reorganization.
A Madison attorney can leverage skillful negotiation tactics during a Chapter 11 business bankruptcy to achieve the most favorable reorganization plan possible. Before the plan can be implemented, the creditors must vote on it, and the court must approve it. After the vote, the debtor must comply with the terms of the reorganization plan.
Subchapter V bankruptcy cases typically involve faster deadlines and approval of reorganization plans. A committee of creditors, typically comprised of the unsecured creditors to whom the debtor owes the most money, is common in a Chapter 11 case. However, a Subchapter V bankruptcy will often forego this committee, another factor that can streamline these cases.
There are numerous benefits to filing for a reorganization bankruptcy. These cases can stop creditors from proceeding with collection actions, reorganize debts with more favorable payment terms, and keep your business operating without interruption.
Running a business can be difficult, and making ends meet can be challenging even if the business succeeds. A Chapter 11 bankruptcy can help your business restructure its debts and assets without closing its doors, creating a pathway to a stronger economic future. Depending on the size of your business and the nature of the secured or unsecured debts involved, your business may instead qualify to file a Subchapter V bankruptcy.
Our Madison Chapter 11 business bankruptcy lawyers can provide aggressive legal representation to help you overcome debt and work to safeguard key assets. If you need quality legal support, an attorney can develop a strategy to resolve the financial crises your business is currently facing. Contact our office today to schedule your confidential case evaluation.
Gillman Capone Law Group
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