Get legal help to determine who may declare Chapter 11 bankruptcy in Monroe, LA.
The bankruptcy code’s Chapter 11 allows for the liquidation or reorganization of debt by both individuals and businesses. In contrast to Chapter 7 and Chapter 13 cases, Chapter 11 bankruptcy cases often entail higher amounts of money in relation to the assets and debts of the individual or business. Before you can consider filing, it is best to be aware of who can declare Chapter 11 bankruptcy in Monroe, LA.
The law was created to give companies the option to restructure their debts into:
- acceptable payment plans.
Dealing with bankruptcy and debt can be burdensome. It doesn’t always have to drag you down. Touch base with Monroe, Louisiana, Chapter 11 bankruptcy attorneys right away to get to the bottom of your bankruptcy case and see the silver lining in life.
What is Chapter 11 Bankruptcy?
Most businesses can file for bankruptcy under Chapter 11, which also has some uses for specific people. When it comes to people, Chapter 11 operates similarly to Chapter 13. Corporate organizations employ Chapter 11 relief the most frequently since it is expensive to file.
The term “reorganization bankruptcy” is frequently used to describe a case brought under Chapter 11 of the United States Bankruptcy Code.
In most cases, the debtor continues to:
- be “in possession,”
- to exercise trustee-like authority,
- is permitted to carry on with its company, and
- is permitted to borrow further funds with the court’s permission.
A proposed plan of reorganization is put forth, the concerned creditors have a chance to vote on it, and if it receives the necessary support and complies with the law, the court may approve the plan.
For the best chance of completely understanding your options, it is advisable that you speak with a Louisiana bankruptcy attorney. A bankruptcy attorney can advise you on who can declare Chapter 11 bankruptcy in Monroe, LA, along with the best options for your case.
Who Can Declare Chapter 11?
Companies of all sizes can file for Chapter 11 bankruptcy to help reduce some of the debt they have accrued.
- This covers private individuals, businesses, and corporations. In a Chapter 11 bankruptcy, a railroad may also be a debtor, unlike in a Chapter 7 bankruptcy. Even if they are not currently operating a business, a person can file a Chapter 11 case.
- Individual debtors should think about filing for chapter 11 bankruptcy if their obligations are too high for a chapter 13 bankruptcy. Congress did not exclude a non-business individual debtor from Chapter 11 restructuring, according to Toibb v. Radloff (1991) 501 US 157, 161. Hence, a person can apply for chapter 11 bankruptcy and rearrange their finances if their secured or unsecured debt exceeds the thresholds for a chapter 13 filing.
- Chapter 11 bankruptcy filings can be made by debtors who are not insolvent. A Chapter 11 is acceptable as long as a debtor needs to restructure its finances.
Who Can’t Declare under Chapter 11 bankruptcy?
A stockbroker or commodity broker is the sole profession that is exempt from filing under Chapter 11, but they may do so under specific conditions under Chapter 7. Other than the value of their investment in the company’s stock, the personal assets of stockholders are not at risk in a corporation’s chapter 11 bankruptcy case (the corporation is the debtor).
It is advisable to consult with a bankruptcy lawyer in Monroe to make sure you are fully aware of the reasons you may not declare or should declare Chapter 11 bankruptcy.
What are the common Chapter 11 bankruptcy Cases?
In order to protect the company’s assets, most Chapter 11 business cases involve the restructuring of several different categories of debt, including priority tax debt, secured debt, unsecured debt, and leases.
Chapter 11 bankruptcy can be tough and confusing to deal with, as with any other form of bankruptcy. While this can be deemed a dark time in your life, fret not. Bankruptcy can be a potential fresh start with the help of E. Orum Young Law’s Monroe, LA bankruptcy attorney.
Executive Contract Debt
Businesses can accept or reject leases and executory contracts under Chapter 11. A garment company that hired a certain manufacturer to produce its clothing for ten years is one example that comes to mind. The garment company has the option to cancel the contract and look for services elsewhere after filing for Chapter 11 bankruptcy.
To be profitable, the clothing company must first convince the judge that terminating its agreement with manufacturer A and entering into a new one with manufacturer B will be beneficial. If they can demonstrate this to the judge, the judge will probably approve the new contract.
Priority Tax Debt
Chapter 11 is a practical tool for rearranging past-due taxes that your business has incurred. Debts like property taxes, income taxes, and payroll taxes can be modified so that you can keep running your business while also paying your taxes. While the typical repayment time for tax debts is five years, Chapter 11 enables you to renegotiate repayment terms with the taxation authority on terms that are agreeable to both sides.
Secured debt is debt that is backed by a physical asset, such as machinery, property, or a car. Whatever debts and collateral will improve the company’s potential to earn a profit must be determined by the business owner before filing for Chapter 11 business bankruptcy. Next, rather than paying the whole sum owed, one would pay the property’s current worth.
Contrarily, unsecured debt includes bills from credit cards and signature loans. These funds can assist an entrepreneur in paying for startup fees and continuing expenses, but they frequently place significant stress on profit margins. A business owner in Chapter 11 bankruptcy can negotiate a repayment schedule for unsecured obligations with creditors.
Having a bankruptcy attorney on your side may be very beneficial in making sure that Chapter 11 bankruptcy is suitable for your business. Get in touch with one of our Monroe bankruptcy lawyers at E. Orum Young Law, Bankruptcy Specialist in Louisiana.
What charges, fees, and paperwork are involved in filing for Chapter 11 bankruptcy?
One must thoroughly prepare prior to filing for chapter 11 bankruptcy. The following list includes the schedules and documents that must be included with a Chapter 11 bankruptcy petition:
- a schedule of every asset;
- a schedule of all obligations (debts);
- a schedule of executory contracts and unexpired leases; and
- a statement of financial affairs.
The filing charge for Chapter 11 bankruptcy, inclusive of administrative costs, was $1,738.00 ($1,167 filing fee + $571 miscellaneous administration fee). Yet, the majority of the expenses related to Chapter 11 bankruptcy are incurred in the fees for accountants, attorneys, and other services required to organize for and manage the bankruptcy process.
The court will also examine any other payments made before filing that are larger than $600, as well as the filing fees, in order to check for preference transfers or fraudulent payments. The court must first grant permission before any further experts are hired to assist with Chapter 11 bankruptcy. The trustee is also entitled to a $325 minimum fee per quarter.
The bankruptcy process involves a complex legal system that can be daunting to navigate alone. If you wish to know who can declare Chapter 11 bankruptcy in Monroe, LA, touch base with E. Orum Young Law’s bankruptcy attorney to get to the bottom of the case.
Speak with an Experienced Chapter 11 Bankruptcy Attorney
If you don’t have the right legal representation, the bankruptcy process can take a long time. Make sure you have a Louisiana bankruptcy attorney to guide you through a Chapter 11 bankruptcy. An attorney can also provide legal advice in other areas of bankruptcy including:
With over 35 years of experience, E. Orum Young has filed over 20,000 bankruptcy cases in Northeast Louisiana. Every step of the way, we’ll look out for your best interests, and if required, we’ll file your claim more quickly. Get a free case review from us right away.