How to Get Rid of Debts with Chapter 11 Bankruptcy

Suppose your business cannot service its debt or pay its creditors when they are due, and you are unable to negotiate more favorable terms. In that case, Chapter 11 bankruptcy allows you to reorganize your business and repay your debts over time.

With a chapter 11 bankruptcy lawyer in Boca Raton MD it is possible to restructure your business to do well again. By eliminating certain debts and obligations, you can use the money that would have gone to pay creditors to invest in your company’s growth. Many businesses that file for Chapter 11 bankruptcy are successful and profitable.

Chapter 11 Bankruptcy

In Chapter 11 bankruptcies, creditors are given a chance to vote on whether to accept the reorganization plan proposed by the debtor. What’s crucial to know about Chapter 11 bankruptcy is that it’s business reorganization, not a personal one. 

If you’re an individual who can’t pay your debts, the other bankruptcy chapters are more appropriate for you. However, if you are a corporation and need to get rid of debt and reorganize your business for a fresh start, Chapter 11 could be the right choice for you.

Step 1

The first step for any business filing for Chapter 11 bankruptcy protection is to contact Boca Raton corporate attorneys in Florida. You will need to provide your attorney with a list of your creditors, copies of any contracts you have entered into with other parties, and the location where your books and records are kept. 

Chapter 11 cases typically involve extensive court filings, so an attorney can help you prepare these filings and ensure that they are adequately prepared.

Step 2

The second step is to file your petition with the bankruptcy court in the jurisdiction where your business is located. The petition will include extensive financial information regarding your business, including recent balance sheets and profit and loss statements, as well as other documents required by the bankruptcy court.

Step 3

The third step is to file a First Day Motion with the court that includes a request for permission from the bankruptcy court to continue operating your business as a “debtor in possession.” You must file this motion within 24 hours after filing your bankruptcy petition with the court. 

The motion will also include a request for financing through one of your creditors who agrees to lend you money during the pendency of your bankruptcy case. This loan will enable you to pay for goods and services during this period, keeping your business running until it can emerge from bankruptcy protection. Don’t worry. Boca Raton corporate attorneys in Florida can help you do just that.

In The End

You will need to gather any information regarding your assets and debts. This includes mortgages, judgments, tax liens, and other secured debt. It is always best if you can provide it in writing. It is not required, but it can make it easier for the judge to understand the facts presented in writing.

So, if you are considering whether to file Chapter 11 in your bankruptcy proceeding, it is best to contact a chapter 11 bankruptcy lawyer in Boca Raton, MD.

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