Miami Chapter 11 Bankruptcy Attorney
For businesses that are struggling with high amounts of debts they cannot repay, Chapter 11 is often a good option. Individuals carrying substantial amounts of debt can also file Chapter 11, although these cases are much rarer. If you are considering filing bankruptcy, you should always consider working with an attorney. This is particularly true when filing Chapter 11, as it is one of the most complex types to file. Our Miami Chapter 11 bankruptcy attorney outlines what you need to know about it below.
How Does Chapter 11 Work?
Individuals and companies can voluntarily file a Chapter 11 petition with the bankruptcy court. In the instances of businesses, however, creditors can come together and file an involuntary petition against a business that has defaulted on its debts. The majority of petitions are filed in the county where the business is located. Still, business owners can choose to file where they are domiciled.
During a Chapter 11 bankruptcy, borrowers draft a repayment plan and submit it to the court for approval, or confirmation. Unlike in a Chapter 13 bankruptcy, there is no time limit on these repayment plans. If the court confirms the repayment plan, the borrower is responsible for complying with its terms. After all of the debt has been repaid, the bankruptcy case is closed.
Requirements for the Reorganization Plan
The reorganization plan is a negotiated contract between the borrower and their creditors. It will outline how businesses will pay their debts in the future, and how it will continue to operate. Businesses that do not have sufficient income to continue operations should consider filing Chapter 7 instead. In order for a bankruptcy court to confirm the reorganization plan, it must meet several requirements. These are as follows:
- Feasibility: A judge will consider whether a reorganization plan is likely to be successful. If the borrower cannot show that they can generate enough profit in the future to repay creditors, the court will not confirm the plan.
- Good faith: Businesses cannot generate revenue through unlawful means, and all terms of the plan must show good faith.
- Protecting the interests of the creditors: While the plan should make payments for the borrower more affordable, installments should also allow creditors to receive at least as much as they would if a Chapter 7 bankruptcy was filed.
- Fair and equitable: Secured creditors, those who have a lien against certain property, must be paid in full and borrowers do not own any of the equity until the debt has been completely paid off.
A Miami Chapter 11 bankruptcy attorney can help you draft a reorganization plan that your creditors and the court will approve.
Call Our Chapter 11 Bankruptcy Attorney in Miami for Legal Help
The Chapter 11 process is extremely complex. At Ronald Cutler, our Miami Chapter 11 bankruptcy attorney can help you navigate it so you obtain the best possible outcome. Call or text us now at 386-490-9949 or chat with us online to schedule a free consultation and to learn more.