What is Chapter 11 Bankruptcy?

Acker Warren, P.C. represents individuals and businesses that need Chapter 11 Bankruptcy. This chapter is intended for high income/high debt individuals and businesses (LLCs, LLPs, Partnerships, Corporations, etc.) to reorganize their business affairs, debts, and assets. When individuals and businesses need more time to reorganize their debts, they may file for Chapter 11 bankruptcy.

For businesses,
Chapter 7 means shutting down. In contrast, chapter 11 allows businesses to reorganize and continue operating. Debtors can propose a plan for profitability while keeping creditors at bay. With chapter 11, you have a better opportunity to plan and reorganize as a business.

During Chapter 11 Bankruptcy, businesses or individuals retain control and possession of their assets under bankruptcy court supervision.

Some immediate results you can expect after filing a Chapter 11 Bankruptcy:

• Foreclosure stops – The creditor must ask the Court’s permission before foreclosing on real property (home, commercial property, etc.)
• Repossession stops – The creditor must ask the Court’s permission first before taking vehicles or equipment.
• Collection calls stop – Debt collectors are required to stop calling you
• Garnishments stop – Debt collectors are required to stop garnishing wages
• Lawsuits stop – Lawsuits are not allowed to progress without Bankruptcy Court permission, which is often difficult for a creditor to obtain. This means debts/lawsuits are often resolved through the bankruptcy.

What you need to consider when you research Chapter 11 Bankruptcy

To confirm a Chapter 11 reorganization plan, the bankruptcy court looks for certain requirements:

1. Likelihood to Succeed – The bankruptcy court must find your proposed plan achievable. Debtors must prove they’ll be able to cover expenses and payments to creditors.
2. Good Faith – The bankruptcy court must find the debtor’s proposed plan in good faith.
3. Best Interest – Creditors will receive at least as much under the plan as it would in a liquidation of the debtor in a Chapter 7 case.
4. Fair and Equitable – Creditors must be paid, over time, the value of their collateral.

Get legal help before you file for bankruptcy!

At Acker Warren, P.C., we’re committed to providing top-of-the-line legal services to Dallas Fort-Worth businesses and corporations. Call us today to learn more about Chapter 11 Bankruptcy or other options that may exist to handle your issue(s).