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Chapter 11 Bankruptcy Attorney in Michigan

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Chapter 11 bankruptcy is used primarily for viable businesses to reorganize their debt. Many corporations, such as General Motors, have used this form of business bankruptcy to allow their company to thrive. In rare instances individuals can file a Chapter 11. Chapter 11 filings are complex and costly. Most individuals can seek and get relief via a Chapter 13 or Chapter 7 Bankruptcy

What is Chapter 11 Bankruptcy

Chapter 11 bankruptcy is used primarily for viable businesses to reorganize their debt. Many corporations such as General Motors have used this form of business bankruptcy to allow their company to thrive after a hardship. Chapter 11 filings are complex and one of the most costly bankruptcy filings. For this reason, companies should carefully analyze their financial situation to make sure this is the best option for them. Our Chapter 11 bankruptcy attorneys can give you a free consultation to help you make the best decision for your business.

Corporations, limited liability companies, and partnerships are primarily those who file for Chapter 11. In rare instances, individuals who have extremely large amounts of debt, but do not qualify for other forms of bankruptcy relief, can also file a Chapter 11. However, almost all individuals seek and get relief via the cheaper Chapter 13 or Chapter 7 bankruptcy filings.

What Happens in a Chapter 11 Bankruptcy Proceeding?

During a Chapter 11 proceeding, a court will help a business restructure their debt. The filing company has the chance to propose a reorganization plan first but it must be in the best interest of the creditors. If they don’t submit or do not have the resources to submit a plan, the creditors will propose their own reorganization plan. These plans typically include reducing expenses through downsizing operations, staffing, reorganizing debts, and/or liquidation of assets. If the plan is deemed fair and equitable, the court will accept it and the process moves forward.

In most cases, businesses remain open after they have started Chapter 11 proceedings. For these businesses, they will still operate as usual but their lose exclusive rights to make major financial decisions This means the business owners cannot make certain decisions such as selling assets, signing new leases or rental agreements, or anything involving changes in expanding or stopping business operations without court approval.

What Chapter 11 Bankruptcy Attorneys Do ?

A Chapter 11 bankruptcy attorney helps businesses or individuals reorganize their debt. While the creditors can submit a reorganization plan, a Chapter 11 bankruptcy attorney works with business owners to come up with a plan that is fair to both the owner and creditors. Throughout the proceedings, businesses will also be required to submit a variety of operational and financial statements and attend hearings. Bankruptcy attorneys handle obtaining and submitting the correct documentation needed and create the roadmap for restructuring existing debts while allowing the company to stay open and afloat.

Chapter 11 Personal Bankruptcy

For individuals filing Chapter 11, bankruptcy attorneys work in a similar manner as they do for a business. They create a plan to reorganize a person’s existing debt that will be accepted by creditor and the court. Individuals might need to file for Chapter 11 if they don’t want to liquidate many of their assets in a Chapter 7 bankruptcy and if they have too much debt to qualify for a Chapter 13 filing. For individuals, a Chapter 11 bankruptcy filing can also help with reducing interest rates or extend repayment terms. This can allow people to stay afloat while also paying off their debt.

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Is Chapter 11 Bankruptcy Right For Me?

For a business, Chapter 11 may be the best option if they:

  • Don’t want to shut down their business, and have a viable business
  • Have a substantial amount of past-due taxes
  • Want to restructure unsecured debt that can be paid off with future profits

For individuals, Chapter 11 may be the best option if they:

  • Don’t want to liquidate many of their assets
  • Have high enough debt that they are disqualified from a Chapter 13 case.

In these cases, with an approved repayment plan creditors are often willing to negotiate what you owe them. With a chapter 11 bankruptcy attorney, you might only have to pay back pennies on the dollar (depending on a number of factors, including the value of your assets).

How Long Does Chapter 11 Bankruptcy Take?

Most Chapter 11 bankruptcy cases last anywhere from six months to five years or more. There are many steps in the process, including: filing a petition with the courts, working with business to prepare and file reports on the cost of a business’ monthly operations, meeting with creditors, filing disclosure statements, attending hearings, completing an approved plan of reorganization,
and finally, a confirmation hearing. The timing of each of these steps will always vary depending on the case and debt size but usually average between 2-5 years or more.

Call Frego Law’s Chapter 11 Bankruptcy Attorneys in Michigan

If you are facing an insurmountable amount of debt and need help, our Chapter 11 bankruptcy attorneys in Michigan can help you today. Deciding to file for bankruptcy protection is a tough choice that no one wants to make, but it may end up saving you money in the long-term and cause fewer consequences in the future. Call Frego & Associates today for a free no-obligation consultation.

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