What happens if I file for a chapter 11 bankruptcy?
If you think your business is going to file for bankruptcy, you might want to consider a chapter 11 bankruptcy. This chapter allows a corporation or business to reorganize their debts under the United States bankruptcy laws. This chapter can be offered to individuals, but is mostly given to major businesses.
Eligibility to file for chapter 11 bankruptcy
If your business is struggling to pay creditors, then you may be eligible to file for a chapter 11 bankruptcy. This criteria is usually met under the federal courts. The difference with this chapter, is that the debtor can become the debtor in possession. This means that you are mostly in control of your business operations during the process. However, you may be observed by the jurisdiction of the court for various actions during your bankruptcy proceedings.
Becoming a trustee of you bankruptcy case
In some cases, you may act as the trustee in your case if one is not appointed to you. As a debtor in possession, you may also obtain financial loans that will benefit your company. In this case, you might offer first priority to the lender to share in your earnings after the bankruptcy is filed. You may also be granted the ability to reject certain contracts in your business. During this process, it might be a good idea to seek legal advice on how to delegate specific contracts during your bankruptcy case.
Getting protection during your bankruptcy case
For protection purposes, you may be given an automatic stay that helps shield against creditors or any litigation against your company. However, there is a possibility that you could lose your business to the company creditors, if your debts exceed the value of your assets.
The repayment plan for chapter 11
Overall, the court is usually responsible for determining whether your repayment plan is suitable under the law. A chapter 11 bankruptcy may allow the debtor to generate the reorganization plan for debts and will most likely give the creditors a chance to vote on the best plan of action.
Getting a bankruptcy attorney
Once this plan is confirmed, then your agreement is binding and sets out the treatment of debts for the duration of your schedule. These contracts can be complex, which is why having a bankruptcy attorney to help you may give you better results. A bankruptcy lawyer will most likely have the knowledge to mold your case so that you can have a clear path back to financial stability.
Is it possible to file for bankruptcy again? Sometimes, your file may get dismissed multiple times. This could be due to not making your payments on time. Your possession could be repossessed during your bankruptcy case. If you need to refile, there might be a way to do so.
Getting your bankruptcy dismissed multiple times, does not mean that you may never get a successful bankruptcy discharge. With the help of a bankruptcy lawyer, you may be able to file for bankruptcy and be relieved of your debts.