Going through filing bankruptcy Chapter 11 is stressful. The courts are intimidating, and the paperwork is confusing and complicated. You don’t know where to turn. Fortunately, we are skilled in Chapter 11 Bankruptcy and can help you file your petition confidently. It is common for some small businesses to fall into hard times in this very competitive economy. Though you may struggle to pay your monthly bills on time, you are not in a hopeless situation. With the help of the United States Bankruptcy law, you can restructure your debt while operating your business normally and earning a profit despite your financial troubles.
Working with a trustworthy bankruptcy attorney from Kurland Law Group guarantees you have somebody on your team dedicated to giving you a clean slate. We pride ourselves in easing our clients’ financial burdens and educating them about filing a Chapter 11 bankruptcy and other chapters.
Kurland Law Group has extensive experience helping clients with bankruptcy. Our attorneys will answer all your questions, explain your options and walk you through the process to ensure you are aware of what is happening at every step of the way.
Call us today or fill out our consultation form after reading this article to see what we can do for you and what our Maryland Bankruptcy lawyers offer – the answer may surprise you.
A great way to find out if you are working with a skilled bankruptcy attorney is through their knowledge of filing Chapter 11 bankruptcy. Besides being dedicated to assisting our clients in clearing their debts, we at Kurland Law Group see to it that we only work with bankruptcy attorneys who:
Thinking about your next move? Contact our law firm so that one of our reliable attorneys can teach you the basic steps in filing for Chapter 11 bankruptcy if you choose to go that route!
Reorganizing debt may help businesses (and people) become more profitable. For Americans, the procedure is governed by Title 11, Chapter 11 in the US Bankruptcy Code. Companies that may file for Chapter 11 restructuring are:
Chapter 11 bankruptcy is a powerful tool that allows businesses or specific individuals to be discharged of their debts through restructuring. Chapter 11, considered one of the most flexible of the bankruptcy chapters, is designed for businesses of any size to restructure their mortgages, re-amortize their loans, and modify their interest rates over up to 30 years. But given its flexibility, this process is more complex than other chapters.
Whether a company continuously struggles with paying its staff on time or constantly has trouble keeping up with overhead expenses, Chapter 11 bankruptcy may be a realistic option.
Here are the benefits of filing for Chapter 11 bankruptcy:
Our Maryland bankruptcy attorneys at Kurland Law Group are determined to help their clients properly reorganize their debts by teaching them how to file Chapter 11 bankruptcy.
You may gain time to restructure and develop a reasonable debt repayment strategy by entering Chapter 11. Your assets would be legally safeguarded.
Divorce, litigation, and medical illnesses are the grounds for Chapter 11 bankruptcy.
Another benefit is that the entity, generally a company, may continue to operate. This generates cash flow to help with repayment. The judge also orders creditors to stay away. As a result of the repayment arrangement, most creditors are amenable to Chapter 11.
Both businesses and individuals may file for Chapter 11bBankruptcy provided they meet the criteria specified below.
Chapter 11 bankruptcy applies to businesses that either seek to reorganize their debt to keep their operations going or be discharged of their debt and permanently cease operations. If you choose the former, the law allows you to continue with business operations and even borrow more money while a debt relief payment plan is being created. Though some minor transactions require the bankruptcy court’s permission, your business should still run as usual.
Even if Chapter 11 is typically a bankruptcy for businesses, it may still be used by individuals who need to clear their debt. Chapter 11 bankruptcy applies to individuals who owe an amount too high to file for Chapter 13. Chapter 11 bankruptcy is also a good option for individuals who do not own enough assets for liquidation but have an income that is too high to qualify for Chapter 7.
Contact our Rockville, MD, bankruptcy attorney about filing a Chapter 11 bankruptcy!
Credit Counseling Course
If you file Chapter 11 as a person (not a company), you must first finish an authorized credit counseling course. To restructure a business’s debts, you do not need to attend this counseling.
Chapter 11 Petition
Fill out an asset (or debt) inventory and write up a financial statement for your petition. Once everything is done, you may submit your petition to the bankruptcy clerk’s office. In most cases, the petition filing results in an “automatic stay.” Most creditors cannot pursue collection attempts against you or your assets unless the bankruptcy court permits them.
Monthly Financial Reports
Monthly operational reports must be filed with the court during Chapter 11 bankruptcy. These reports detail your monthly income and spending. Your creditors, the court, and the US Trustee may all see the reports. These reports enable these institutions to analyze your suggested reorganization plan’s feasibility. Because the court will only allow feasible plans, you should closely monitor your monthly operational reports. Most debtors find it beneficial to seek court approval to hire an accountant.
First Debtor Interview and Creditor Meeting
Many debtors will have to go to an initial debtor interview first. This is an occasion for the United States Trustee to meet with the debtor and discuss the matter.
Then you must attend the 341 creditors’ meeting. This is usually thirty to forty-five days after the lawsuit is filed. This is a public hearing where your creditors may cross-examine you under oath on your bankruptcy petition. Chapter 11 hearings usually run one to two hours.
The Disclosure Hearing and the Disclosure Statement
You must submit a disclosure statement with your proposed reorganization plan and send it to all interested parties, including your creditors. The disclosure statement describes how creditors may participate in bankruptcy and how their rights may be impacted.
Parties with interest may object to the disclosure statement’s wording during a hearing. The hearing is only a formality since the disclosure statements are often accepted.
The Proposed Reorganization Plan
The restructuring plan details how you will handle your creditors. The creditors are classified as priority debt creditors, secured debt creditors, or unsecured debt creditors. If a creditor doesn’t like your plan, you may seek the court to compel it to accept it. A cramdown occurs when the court forces the creditor to accept the plan.
Hearings for Confirmation
You ask the court to approve your restructuring plan at your confirmation hearing. The court will not approve your proposal until all of your creditor classes have approved it. A request to cancel non-accepting courses may then be filed, rescheduling the confirmation hearing. The creditor is presumed to accept the proposal without responding to a cramdown motion. If the creditor responds, you might attempt to negotiate plan treatment. If you can’t agree, the court will decide.
Paying Into the Plan
Once the court has authorized your plan, you may begin paying your creditors according to the plan’s terms. This creates new contracts with your creditors. If you miss a payment, the creditor may sue you, leaving you with no recourse. Depending on the debts restructured, payments may continue for several years. Mortgages and vehicle loans are usually re-amortized over time.
After you pay your unsecured creditors, you may seek the court for a discharge of the remaining unsecured obligations. The discharge stops these creditors from collecting any of the debts in the plan. The discharge is the major goal of Chapter 11 bankruptcy and marks the end of your case.
A bankruptcy filing is a difficult choice. Knowing that there are alternatives may help you decide what to do. Here are some examples:
Debt management plans
An agreement to pay back the whole principal overtime may be negotiated. Create a monthly payment plan that meets your individual requirements and helps organise your payment process. Notably, the lender is not required to approve it.
Consolidation of debt
When done properly, debt consolidation reduces your monthly payment and consolidates all your obligations into one flat amount. Debt consolidation usually takes the form of a loan with substantially cheaper interest rates than individual credit card issuers.
Debt settlement allows a debtor to pay a flat amount generally less than their existing debt, which is typically 50–75% of the initial debt value. Less than agreed settlements will be reported to the credit agencies by lenders. This record will stay on your credit report for seven years.
Personal loans may be obtained even with negative credit. But the monthly payment and interest rates will be exorbitantly high. So you must decide whether this is the best solution for you.
Filing for Chapter 11 bankruptcy in Maryland is a wise choice for those who are struggling to repay their debt, but it’s not something that you should rush into. Getting the right information and contacting a qualified bankruptcy attorney in Maryland are important.
If you are looking for a Chapter 11 bankruptcy attorney in Maryland, our firm can help. We have helped hundreds of people file for bankruptcy and emerge stronger, shining stars. So, if you have been contemplating bankruptcy and have a few questions, get in touch with our bankruptcy law firm in Rockville! We understand the scare and the hassle it comprises for you and your family.
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