Jacksonville Chapter 11 Bankruptcy Attorney
Chapter 11 bankruptcy is used mainly by businesses that have heavy burdens of debt. While small businesses can sometimes file Chapter 11, this option is generally reserved for businesses. Individuals can file for Chapter 11 in certain circumstances as well, but this is rare. During a Chapter 11, the business creates a repayment plan that spreads the debt out over time, making installment payments more affordable. The process of Chapter 11 is incredibly complex. A Jacksonville Chapter 11 bankruptcy attorney will ensure no mistakes are made that could hurt you or your business.
The Chapter 11 Bankruptcy Process
Every Chapter 11 bankruptcy starts when the petition is filed with the court. An automatic stay is then issued, which prevents creditors from trying to recover the debt, or taking legal action against the borrower. The borrower then drafts a repayment plan with terms that are viable and do not require the debtor to concern themselves with existing debt.
Businesses often choose to file Chapter 11 over Chapter 7 because the former allows the company to continue operating. Creditors are generally more willing to negotiate the terms of a Chapter 11 because they know they will not have the same option in Chapter 7. Creditors are placed into different classes during a Chapter 11 bankruptcy. Federal and state agencies, employees owed wages, and stockholder interests take precedent. Secured creditors have their own class, as do creditors for unsecured debt.
Who Should File Chapter 11?
Chapter 11 is a suitable option for many people and businesses. Small business owners may find debt relief while still being able to run their business. While bankruptcy can help with debt, it cannot help with insufficient income. Therefore, if a small business is struggling to make a profit, the business will likely have to file Chapter 7. Larger businesses and corporations often find Chapter 11 more appropriate, as it can prevent the company from being sold and protect the interests of shareholders.
Individuals can file Chapter 11 instead of Chapter 13 when their debt exceeds the bankruptcy limits of Chapter 13. Unsecured debt exceeding $465,275 or secured debts valued over $1,395,875 disqualify one from filing Chapter 13.
Creditors can also file Chapter 11. This is applicable when a business carries significant debt but the owner does not want to file for bankruptcy. Creditors can file and force the business into the bankruptcy process.
Our Chapter 11 Bankruptcy Attorney in Jacksonville Can Protect Your Business
The Chapter 11 bankruptcy process is extremely complex, and it is costly, as well. If you go through it alone and make a mistake, it could mean a great deal of time and money lost. At Ronald Cutler, our Jacksonville Chapter 11 bankruptcy attorney can ensure this does not happen. We can help you negotiate the terms of the repayment plan so it is approved by the court and makes your debt more affordable to repay. Call us now at 386-490-9949 or contact us online to book a free consultation with our experienced attorney.