Chapter 11 Bankruptcy Attorneys
Reorganization Bankruptcy Lawyers in Fort Lauderdale
Serious debt can be extremely daunting, and if left unanswered, it could have a severe impact on your personal and professional life. Chapter 11 bankruptcy, also referred to as reorganization bankruptcy, can be an effective tool to resolve mounting debts, both for businesses and individuals. Though it once held a negative stigma, more and more people are using bankruptcy to move past complex financial problems and start fresh.
Why Choose Us?
Our experienced legal team at Leiderman Shelomith Alexander + Somodevilla, PLLC has ample experience helping clients file for bankruptcy to restructure overwhelming debt, and we want to help you, too. We are passionate about finding workable solutions and comprehensive strategies for those facing financial issues, which is why we provided our clients with personalized attention through each step of the legal process.
Ready to get started? Contact our team at LSAS today to schedule a free consultation.
Defining Chapter 11 Bankruptcy
Chapter 11 bankruptcy is commonly referred to as reorganization bankruptcy because it allows the individual or business to retain their assets (in most cases) while setting up a repayment plan to regain control of their outstanding debts.
While the process may sound straightforward, Chapter 11 is actually the most complex form of bankruptcy because it leaves so much up to interpretation. There is freedom in this method, which can be beneficial, but it also means it’s crucial to develop an airtight plan to restructure debts, assets, and other related affairs. It is also one of the more expensive bankruptcy methods.
Before you decide whether Chapter 11 is the best method for you, discuss your options with our skilled attorneys. We can sit down with you and evaluate the details of your situation to determine which type of bankruptcy would be most beneficial to you.
What Are the Benefits of Chapter 11 Bankruptcy?
Although Chapter 7 bankruptcy is the most common method for individuals in need of financial relief, some individuals may benefit from Chapter 11 instead. Businesses, on the other hand, often resort to Chapter 11 bankruptcy because it allows them to resolve large debts without adhering to a strict plan (as is the case with Chapter 13 bankruptcy).
The benefits of Chapter 11 bankruptcy include:
- The business may continue to operate while Chapter 11 bankruptcy takes effect.
- The filer has the power to propose a reorganization plan for unsecured debts.
- The judge can order creditors to stop calling and harassing the filer once the bankruptcy process begins.
The Small Business Reorganization Act of 2019
If you chose to file Chapter 11 bankruptcy, our firm can help you utilize Subchapter V, which was recently established by the Small Business Reorganization Act of 2019. This new option can help small business debtors as they file for business bankruptcy by providing them with a more solidified structure to help smaller businesses recover and thrive. Prior to this extension, bigger businesses benefited from Chapter 11 far more often than small businesses.
To help solve this problem, the Small Business Reorganization Act of 2019 does the following:
- Decreases creditor involvement
- Elimination of the Absolute Priority rule to help debtors retain ownership interests
- Funnels all disposable income towards debt repayment
- Utilizes a court-appointed trustee
What Does Chapter 11 Mean for Creditors?
In Chapter 11, a debt reorganization plan will be proposed to show how the debtor will plan to repay creditors. Payments to creditors are prioritized based on the type of debt held.
The typical order of priority:
- Secured creditors, such as banks, are first
- Unsecured creditors
Chapter 11 initiates an automatic stay to protect debtors and there are also regulations in place to protect creditors. For example, creditors are not always paid full. It may be that only a certain percentage will be repaid, however, creditors have the right to vote on a company’s proposed reorganization plan and the bankruptcy court must approve the plan before it goes through, so consider exercising this right. Note that creditors are not allowed to sue a Chapter 11 debtor for money they are owed during the process.
Are you a creditor who is owed money by a business that filed for Chapter 11? At Leiderman Shelomith Alexander + Somodevilla, PLLC we provide services to both creditors and debtors, so we have a thorough understanding of the law and the rights for both sides. Our Fort Lauderdale Chapter 11 bankruptcy attorneys have the experience to guide you in the best ways to collect the money you are owed.
Let LSAS Firm Help You
Are you ready to regain control of your individual or business finances? Filing Chapter 11 bankruptcy can be the first step in a necessary journey to help you regain your financial footing, and our firm is here to guide you through each bend in the road. We have decades of experience in bankruptcy and debt resolution, and we are ready to put our skills and knowledge to work for you.
Contact LSAS today to schedule a free consultation with our compassionate team.
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