West Palm Beach Chapter 11 Bankruptcy Attorney
Both businesses and individuals may, for a variety of reasons, reach a point in their operations where they are insolvent – that is, they are unable to pay the debts that they owe. When this point is reached, there may be few viable options for debt relief. One thing that can help is filing for bankruptcy. Typically reserved for corporations and businesses, but not exclusively used by these entities, a Chapter 11 bankruptcy can help a debtor reorganize their debts and gain ground on managing their finances. At the law offices of Bruce S. Rosenwater & Associates, P.A., our experienced West Palm Beach Chapter 11 bankruptcy attorneys can guide you or your business through the process of filing a Chapter 11 bankruptcy. Please call our law firm today to get started.
What Is a Chapter 11 Bankruptcy?
Referred to as “reorganization bankruptcy,” Chapter 11 bankruptcy is most commonly used by businesses, not individuals; however, individuals may file a Chapter 11 bankruptcy, although Chapter 7 and Chapter 13 bankruptcies are usually faster and less expensive. Businesses cannot file for a Chapter 13 bankruptcy.
Chapter 11 bankruptcy is designed for businesses that are insolvent and have debts, but that want to keep operating and need time to restructure their finances. Another unique element of a Chapter 11 bankruptcy is that it can be pursued voluntarily, as is the case in most other types of bankruptcy filings, or it can be forced on a business if at least three creditors file a petition with the bankruptcy court.
Once the bankruptcy petition is filed, the business (or the individual) has four months–which can be extended to up to 18 months–to file a reorganization plan. Essentially, the plan is an agreement between the debtor (business or individual) and creditors that outlines how the debtor will operate in a manner that allows it to repay its financial obligations to creditors. Typically, the reorganization plan will include an agreement that the creditors will forgive or downsize some of the debtor’s financial obligations. Note that creditors can vote on whether or not they accept a repayment plan.
Keep in mind that under a Chapter 11 bankruptcy, a debtor has a “one-time absolute right” to convert the Chapter 11 bankruptcy into a Chapter 7 bankruptcy, with a few exceptions. Talk to an attorney to learn more about this option.
Pursuing a Chapter 11 Bankruptcy Is Complex – Consult with an Experienced Bankruptcy Attorney
Filing a Chapter 11 bankruptcy is typically not advised for individuals. For businesses, a Chapter 11 bankruptcy is something that should be considered only after careful consideration and legal counsel. While Chapter 11 bankruptcies can be effective, they are not a guarantee of future solvency.
At the law office of Bruce S. Rosenwater & Associates, P.A., we understand how challenging navigating a bankruptcy action can be. Our bankruptcy attorneys provide counsel to both individuals and businesses, and are ready to meet with you to discuss your options today. Please call us or send us a message to get started.