Fort Lauderdale Chapter 11 Bankruptcy Attorney
There are many different types of bankruptcies in Fort Lauderdale but of them all, Chapter 11 is the most complex. Chapter 11 is mostly used by businesses that need to restructure their corporate debt. However, this type of bankruptcy is also appropriate for certain individuals, such as those who have too much debt to qualify for Chapter 13. Below, our Fort Lauderdale Chapter 11 bankruptcy attorney explains more.
What is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is vastly different from other types. Unlike Chapter 7, businesses and individual borrowers do not have to pass a means test to show that they do not have the income to repay the debt. Instead, the debt is reorganized into a repayment plan. Unlike Chapter 13 bankruptcy, however, there is no time limit on the repayment plan. This is beneficial for filers because they can spread the repayment plan for a much longer time, making installment payments more affordable. Chapter 11 bankruptcy can also deal with much larger amounts of debt.
Chapter 11 bankruptcy can take a long time, as a case is not actually final until the debt has been repaid. During the process, businesses cannot make certain decisions without the approval of the court. These include the sale of assets or inventory, expanding or stopping business operations, and entering into or terminating a rental agreement. Engaging in these activities without court approval has serious consequences. A Fort Lauderdale Chapter 11 bankruptcy attorney can ensure you remain in compliance with the requirements.
Why File Chapter 11 Bankruptcy?
Most business owners file Chapter 11 instead of other types of bankruptcies because it allows them to keep their business open and operating. Being able to do so generates profit, which can help during the repayment period.
After the court receives the bankruptcy petition, a judge will issue an automatic stay. This stay prohibits creditors and debt collectors from contacting a business in an attempt to try and recover the debt. Creditors and debt collectors also cannot take legal action against businesses, such as filing a lawsuit against them, while a bankruptcy case is ongoing. The automatic stay will remain in place until the bankruptcy case is finalized. Another benefit of filing Chapter 11 bankruptcy is that creditors are often less likely to challenge a proposed repayment plan. They know that they will still collect all or most of the debt and so, they are often very receptive to the terms.
Call Our Chapter 11 Bankruptcy Attorney in Fort Lauderdale Before You File
Chapter 11 bankruptcy can help businesses and individuals alike, but the process is extremely complicated. At Ronald Cutler, our Fort Lauderdale Chapter 11 bankruptcy attorney can guide you through it, explain the laws that pertain to your case, and help you draft a repayment plan that is fair and acceptable by the courts and your creditors. Call us now at 386-490-9949 or connect with us online to schedule a free consultation and to learn more about how we can help.