Chapter 11 Bankruptcy
Chapter 11 bankruptcy for an individual, small businesses or corporations is designed to provide a way to reorganization of all the debts.
Chapter 11 for businesses
(Corporations, LLCs, LLPs, or other business entities)
Businesses that want to continue to operate but face one or more of the following challenges, may benefit from filing for Chapter 11 bankruptcy in California:
- Heavy legacy debt that cannot be serviced due to current market conditions,
- Real estate or other assets that are over-encumbered,
- Expensive leases on unproductive or unnecessary property, or
- Other expensive financial obligations that make continued profitable operation impossible
Chapter 11 for real-estate oriented businesses
Certain businesses (typically LLC’s) are formed to own and operate commercial real estate (or rental properties). However, the declining commercial real estate prices have caused many such LLCs to have a negative net-worth, or face negative cash flows. Through a Chapter 11 Bankruptcy it is possible to reduce the principal balance on the commercial real estate and help steer your business towards profitability. Call us for advice and we will be ready to provide sound legal assistance and help you find the best solution for your situation.
Chapter 11 for individual person
Most individuals who file for Chapter 11 have income or debts that exceed the allowable limits under Chapter 13 and Chapter 7. Individuals who own investment (rental) properties that are worth less than their loan balance may be able to take advantage of Chapter 11 to reduce the mortgage balances on their investment properties. Additionally, an individual in Chapter 11 may be able to “strip” second mortgages on investment or residence real estate.
Some of the common benefits that debtors can enjoy upon reorganization under Chapter 11 are:
- Automatic stay of all lawsuits, foreclosures, repossessions, bank levies, and other collection activities
- Avoidance and recovery of certain involuntary transfers
- Preservation of a going concern
- Temporary deferral of obligations incurred pre-petition
- Adjustment of interest rates
- Cure of defaulted or accelerated obligations
- Ability to assume or reject executory contracts and unexpired leases
- Ability to sell property free of liens and interests
- Extend payment of unsecured tax debts
- Can borrow money post-petition to finance reorganization
Call Today To Learn More
For more information about filing for Chapter 11 Bankruptcy, please call us for a free, no-obligation consultation.