An Overview of Chapter 11 Bankruptcy
With Chapter 11 bankruptcy, there is one objective in mind: to reorganize debts and assets. Unlike Chapter 7 where assets are liquidated to pay off creditors, Chapter 11 is arguably more forgiving. With Chapter 11, you don’t have to liquidate all of your assets to pay off your debts. You can work with your creditors to restructure payments towards your debt. This blog is an overview of Chapter 11 bankruptcy.
If done successfully, a Chapter 11 bankruptcy can save a sinking ship. How can you ensure its success? By hiring an experienced, passionate New Jersey Chapter 11 bankruptcy attorney. As we mentioned, Chapter 11 bankruptcies are expensive and time-consuming because it’s the most legally complicated option. We are here to help take the legal weight off your shoulders.
Turning Lemons into Lemonade
Companies may choose a Chapter 11 bankruptcy if the overall value of the company is greater than the value of its individual assets that it could sell off. With Chapter 11, your business will keep its employees, remain open for business, and the more profitable parts of your business can stay intact. With Chapter 7, you will have to close up shop.
Usually it’s corporations, partnerships, and LLCs that file for Chapter 11 bankruptcy. However, it is also available for individuals who do not qualify for Chapter 7 or 13.
A New Jersey Chapter 11 bankruptcy attorney will help keep your creditors off of your back. The law prohibits the harassment of you or your family by creditors. Creditors also cannot revel your debt. They may be breaking the law if they do so. Having a lawyer on your side can keep them at bay. This is because they can only speak to your lawyer after you hire one.
To start bankruptcy proceedings, you and your lawyer must go to the courthouse to fill out the necessary forms. Be aware that this will require a detailed review of your financial history. Once it is properly filed with the court, creditors are no longer allowed to take legal action against you individually.
The creditors with the largest unsecured debts against you will form a creditors’ committee. They can consult with you on your bankruptcy case, look closely at your business operations and conduct, and help come up with a plan for reorganization. We at Lucid Law can represent you at these creditors’ committees and can draft up a plan of reorganization that is thorough and strong. We will work with you to come up with and detail a plan to get back on your feet, as well as a means for executing the plan.
The Future Can be Bright
The goal with Chapter 11 is to pay off your debts with a more manageable payment system set up. Therefore, allowing your business to run and continue. Eventually, the goal is to get your business profitable again and to increase its net cash flow.
This overview of Chapter 11 bankruptcy may seem daunting, but it can also help reinvigorate your business. There is still hope, and we will be there by your side every step of the way. Call us at (908) 350-7505. We can get your business back on the right path.