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If you've begun researching possible bankruptcy options, you're no doubt aware that there are different "chapters" of bankruptcy protection that you can file under. Chapter 11 is a widely used form of bankruptcy that offers arguably the most flexible protection of all the chapters. Because of this, it is also generally regarded as the most complicated chapter.
Chapter 11 is probably the most infamous form of bankruptcy protection, likely because it is the chapter of choice for businesses and large organizations. Unlike Chapter 13, Chapter 11 does not have a debt limit that can disqualify the borrower from filing. This makes Chapter 11 ideal for companies, which often have well over the amount of debt allowable under Chapter 13.
The different chapters available to borrowers each have their own strengths, weaknesses, and requirements. One of the most basic distinctions between different chapters is whether that chapter provides protection primarily in the form of liquidation (like Chapter 7) or reorganization (like Chapters 11 and 13).
Chapter 11 bankruptcy protection falls under the category of reorganization. In other words, the debtor does not discharge their large items and debts; rather, they change the amount and nature of their payments, allowing them to continue in relative financial normalcy. In this situation, the borrower is known as a "debtor in possession" because they retain possession of the object of their secured debt.
Although individuals can file under Chapter 11 (particularly if they have a high amount of debt), Chapter 11 is usually most often utilized by businesses.
Before doing anything, it's important that you have a thorough consultation with a Chapter 11 bankruptcy lawyer. Determining the appropriate chapter to file under is a very complex process that absolutely needs to be overseen by someone intimately familiar with bankruptcy law.
During conversations with your attorney (JT Legal Group offers a free initial consultation), the two of you will analyze the type of debt you have, as well as the financial workings of your business. From there, your Chapter 11 bankruptcy lawyer will work to present your case in such a way that it has the greatest likelihood of being confirmed (declared by the courts to be binding and active). Remember that the major creditors must vote to affirm the bankruptcy plan, or it usually will not be approved.
As mentioned earlier, Chapter 11 is usually most appropriate as a way to restructure the debt of businesses. While individuals can also file under Chapter 11, they are usually better served by Chapter 13, a less complicated chapter aimed specifically at private individuals.
Chapter 11 is also a good option when the debt amount in question is in the millions. One of the ways in which Chapter 11 provides flexibility is its distinct lack of a debt cap in order to qualify for protection.
Although creditors must vote to affirm the Chapter 11 reorganization plan put together by the debtor, their attorney, and the court system, Chapter 11 can still be confirmed even if the debtor doesn't receive the requisite votes. This is called a cramdown, and a good Chapter 11 bankruptcy attorney will have a strategy in mind to best take advantage of the rules surrounding a cramdown.
At JT Legal Group, our Chapter 11 attorney fees are competitive and affordable when considering the top-notch representation you will receive from our veteran legal team. We believe that Chapter 11 attorney fees should be fair and reasonable for our clients, who we know are often struggling through a difficult financial time. JT Legal Group has been representing individuals in matters revolving around their property or finances for years. We fight for consumer rights and use our extensive knowledge of the law to help you get back on your feet and focusing on what matters.
Michael Avanesian specializes in the field of corporate restructuring and litigation. Mr. Avanesian has a wide range of experience in Chapter 11 bankruptcy cases and has represented corporate and individual debtors, secured creditors, unsecured creditors, lessors, lessees, trustees and other interested parties in bankruptcy cases and related litigation.
The Chapter 11 bankruptcy attorneys at JT Legal Group care about representing the rights of borrowers and their businesses. Call today to get a free 15 minute consultation and see if Chapter 11 can work for you.