Naples Chapter 11 Bankruptcy Attorney
There are many different types of bankruptcy you can file in Naples. Of them all, Chapter 11 is the most complicated. Most often, Chapter 11 bankruptcy is used by businesses that want to repay their debt while remaining open and continuing operations. In rare instances, Chapter 11 is also used by individuals who have high levels of debt. Our Naples Chapter 11 bankruptcy attorney explains more below, so you can determine if the option is right for you.
How Does Chapter 11 Bankruptcy Differ from Others?
The two main types of bankruptcy people file are Chapter 7 and Chapter 13. Chapter 7 discharges a borrower’s debt, but it also has the strictest eligibility requirements. Chapter 7 is also known as liquidation bankruptcy because in some cases, a debtor’s property is sold and the proceeds are distributed among their creditors.
Chapter 13 does not discharge debt but instead, it reorganizes it into a repayment plan. Repayment plans typically last for three to five years and during that time, the debt is spread out into smaller, more affordable payments. There are limits on the amount of debt Chapter 13 will deal with, but borrowers are not at risk of losing any property.
Chapter 11 is significantly different from Chapter 7. Like in a Chapter 13 bankruptcy, Chapter 11 will reorganize the borrower’s debt into a repayment plan. Even these plans are different from those in Chapter 13. There are no limits on repayment plans in Chapter 11 largely due to the fact that the levels of debt are so much higher.
Unlike both Chapter 7 and Chapter 13, businesses and individuals are not the only ones who can file Chapter 11. Creditors can also involuntary file, forcing a business to reorganize their debt.
What are the Benefits of Chapter 11?
The biggest benefit of filing Chapter 11 is that business owners can keep their doors open. Being able to continue operating a business generates revenue, which can make it easier to comply with the terms of the repayment plan. In fact, if a business has insufficient income, it is usually recommended that they file Chapter 7 instead of Chapter 11.
Another advantage of filing any type of bankruptcy is that the court will issue an automatic stay. This prohibits creditors from contacting the business or individual in an attempt to collect the debt. An automatic stay can also protect business owners from lawsuits, and individuals from wage garnishments.
Lastly, creditors are often more willing to negotiate affordable repayment amounts in Chapter 11. They know that they are guaranteed to receive most or all of the debt and so, they are less likely to try and challenge certain components of the repayment plan.
Our Chapter 11 Bankruptcy Attorney in Naples Can Help
The Chapter 11 bankruptcy process is extremely complicated. At Ronald Cutler, our Naples Chapter 11 bankruptcy attorney has the necessary experience to guide you through it so you obtain the best outcome possible. Call or text us now at 386-490-9949 or chat with us online to book a free consultation with our seasoned attorney.