It might be stressful to file for Chapter 11 bankruptcy. The documentation is difficult to understand, the courts are frightening, and you are unsure about your options. You are also unsure if you qualify for Chapter 11 eligibility in Rockville, MD. It may be challenging to make on-time payments on your monthly obligations, but your situation is not hopeless. You can still reorganize your debt with the aid of United States bankruptcy law, run your business, and make a profit despite your financial difficulties.
Working with our Rockville bankruptcy lawyer from Kurland Law Group ensures that you have someone on your side committed to giving you a fresh start. The Kurland Law Group has a wealth of knowledge assisting clients with bankruptcy. To ensure you understand everything happening at the procedure, our attorneys will answer all your questions, lay out your options, and guide you through the steps. Give us a call for a free phone consultation to find out what we can do for you and what services our Maryland bankruptcy lawyers provide. You might be surprised by the response.
Why Do I Need a Bankruptcy Attorney in Rockville, MD?
Knowing how to file Chapter 11 bankruptcy is a brilliant way to determine if you are working with a skilled bankruptcy lawyer. In addition to being committed to helping our clients pay off their obligations, Kurland Law Group makes sure that we only collaborate with bankruptcy lawyers who:
- Resolves to challenge financial challenges by looking for practical and long-lasting answers.
- Helps with the changes you can make to reduce your debt automatically.
- Doesn’t lose time to get your legal matter resolved and restore your sense of calm.
- Handles various matters outside of bankruptcy, including asset protection and bankruptcy protection, wage garnishment, foreclosure, and loan modifications.
Are you considering your next move? If you decide to file for Chapter 11 bankruptcy, get in touch with our office so one of our Maryland bankruptcy lawyers can show you the ropes!
What is Chapter 11 Bankruptcy?
A Chapter 11 restructuring plan helps the business continue operations while balancing revenue and expenses. The debtor may sell some of its assets to recoup some of its debts. This type of bankruptcy is one of the most flexible bankruptcy chapters.
Chapter 11 cases or litigations filed under the United States Bankruptcy Code is known as a “bankruptcy reorganization.” Typically, the individual debtor is still “in possession,” has the responsibilities of a trustee, is permitted to continue its business, and with the court’s approval, may borrow more money. The concerned secured creditor can vote on a proposed plan, and once it receives the required support and complies with the law, the court may approve the plan.
Remember the following:
- Chapter 11 bankruptcy is an option for most business types and may be a wise choice for some people. When it comes to people, Chapter 11 is similar to Chapter 13. Corporate entities are the most frequent users of Chapter 11 bankruptcy relief because of its high cost.
- Chapter 11 is typically used to reorganize a business, whether it is a corporation, a sole proprietorship, or a partnership. Stock and commodities brokers are not allowed to file under Chapter 11, and railroad organizations must comply with different Chapter 11 criteria than other types of businesses.
- Other than the value of their stock investment, a corporation’s investors’ assets are often not at risk in a Chapter 11 bankruptcy case. A single-proprietorship, however, puts both its business and personal assets at risk if it declares Chapter 11 bankruptcy.
Benefits of Filing for Chapter 11
The advantages of filing for Chapter 11 bankruptcy are as follows:
- The collection procedure is put on hold, including payment demands, evictions, foreclosures, collections trials, bank levies, till taps, and property seizures.
- Despite being in debt, a business owner is still in charge of operations because there won’t be a bankruptcy trustee present during the filing process.
- Chapter 11 established a payment plan, which gives your business a chance to continue expanding as you pay off your debt.
Our Maryland bankruptcy lawyers at Kurland Law Group are committed to instructing their clients on filing for Chapter 11 bankruptcy to reorganize their obligations effectively.
What are the Other Types of Bankruptcy?
With the aid of the legal procedure known as bankruptcy, you have the option to regain control over your finances. Bankruptcy might be the best action for people or corporations who have accumulated more debt than they can manage, including tax obligations. People who file for bankruptcy typically employ one of these two tactics:
- Chapter 7 Bankruptcy: For individual debtors, Chapter 7 is the most popular and quickest type of bankruptcy, often taking 120 to 180 days to complete. All debtors who file for Chapter 7 bankruptcy can repay the debt by selling assets, including real estate, to pay a secured creditor. Medical debt, credit card debt, and personal loan debt are all types of debt that can be discharged in a Chapter 7 bankruptcy.
- Chapter 13 Bankruptcy: If you don’t meet the requirements for Chapter 7 or want to keep non-exempt property, this may be your best alternative. But remember that Chapter 13 bankruptcy generally takes far longer than Chapter 7. This is so that you can reorganize your debt, including secured debt, into a manageable three- to five-year repayment schedule through Chapter 13. Any unpaid obligation is canceled when the plan expires.
Who Can File for Chapter 11 Bankruptcy?
The filing of a Chapter 11 bankruptcy is generally open to anyone. Chapter 11 debtors can be people, big or small businesses, partnerships, joint ventures, partnerships, and limited liability entities. No limitations on debt, income or other considerations apply to Chapter 11 bankruptcy filings. A total debt load of $3,024,725 or less qualifies as a “small business filer” or small business debtor for Chapter 11 Subchapter V.
Steps that Must be Taken into Consideration when Filing for Chapter 11
Chapter 11 bankruptcy involves numerous steps, including:
- Credit Counseling Course: As an individual, you must complete an approved credit counseling course before filing for Chapter 11. You don’t have to go to this counseling if you want to restructure a business’s debt.
- Chapter 11 Request: Create a financial statement and an asset or debt inventory for your petition. You can submit your petition to the bankruptcy clerk’s office once everything is finished. Most creditors cannot pursue collection actions against you or your assets unless the United States bankruptcy court approves them. In most situations, filing the petition results in an automatic stay.
- Financial Reports Per Month: Monthly operating reports must be submitted to the court when filing for Chapter 11. You may see your monthly income and expenses in these reports. The reports may be seen by the court, the US Trustee, and your creditors, which gives these organizations the ability to evaluate the viability of your suggested restructuring plan. You should carefully examine your monthly operational reports since the court will only approve realistic plans. Most debtors find it advantageous to request court permission before hiring an accountant.
- Initial Debtor Interview and Meeting with Creditors: Several debtors need to attend a debtor interview first. The United States Trustee will meet with the debtor to discuss the situation. Your presence is a must.
- Your creditors may question you under oath during this open hearing about your bankruptcy filing. This occurs often, 30 to 45 days following the filing of the complaint. Hearings under Chapter 11 often last one to two hours.
- The Disclosure Statement and Disclosure Hearing: A disclosure statement, which must be sent to all parties involved, including your creditors, along with your proposed reorganization plan, is required. The disclosure statement explains how creditors’ participation in bankruptcy might work and how that might affect their lien or claim.
- During a hearing, interested parties may raise objections to the disclosure statement’s phrasing. The disclosure statements are frequently accepted, so the hearing is merely a formality.
- Proposed Reorganizational Plan: The restructuring plan outlines your strategy for dealing with your creditors. Priority debt creditors, secured debt creditors, and unsecured debt creditors are the three categories of creditors. You can ask the court to order a creditor to accept your plan if they don’t like it. When the court orders the creditor to accept the plan, it is known as a “cramdown.”
- Confirmation Hearing: You petition your restructuring plan for court approval at your confirmation hearing. Your proposal won’t be accepted by the Supreme Court until all of your creditors have agreed to it. Without rebutting a cramdown motion, the creditor is assumed to approve the confirmed plan. If the creditor reacts, you might try to bargain for treatment. If you can’t come to a decision, the court will.
- Contributing to the Plan: You can start making payments to your creditors following the provisions of your plan after the court has approved it. New agreements are made with your creditors as a result. If you don’t make a payment on time, the creditor may sue you, and you’ll have no other options. The length of the payments may vary depending on the restructured debts. Loans for vehicles and homes are frequently re-amortized.
You can ask the court for a discharge of the remaining unsecured debts after paying them to your unsecured creditors. The discharge prevents these creditors from pursuing any Chapter 11 plan-related debts. The discharge, which concludes your case, is the objective of Chapter 11.
Depending on the circumstances and the type of firm, Chapter 11 bankruptcies often take between six months to two years to complete. Our Rockville attorneys collaborate closely with you to ensure you take full advantage of bankruptcy legislation in the United States.
Call our Rockville Chapter 11 Bankruptcy Attorney Now!
If you’re having trouble paying off your debt, filing for Chapter 11 bankruptcy in Maryland is a smart move, but it’s not something you should do right now. It is necessary to obtain public safety and accurate information, like knowing if you pass the Chapter 11 eligibility in Rockville, MD, and speak with a bankruptcy lawyer.Kurland Law Group’s Chapter 11 bankruptcy lawyer can assist if you need it in Maryland. We have helped hundreds of individuals in declaring bankruptcy and coming out stronger. If you’ve been contemplating filing for bankruptcy and have questions, get in touch with our Rockville bankruptcy law firm and have a free case evaluation!