Get Your Business Operations Back On Track
Chapter 11 bankruptcy can allow you time to reorganize your business finances and provide a suitable payment plan feasible for you and your creditors. Our attorneys at Springer Larsen Greene, LLC, can help you establish what type of payment plan best fits your needs and guide you through the rest of the bankruptcy process.
The Chapter 11 Bankruptcy Process
When a business files for Chapter 11 bankruptcy, an automatic stay preventing collection attempts is immediately initiated. The business then has to file a reorganization plan specifying how it intends to repay its debts over time. A meeting is held with the creditors, and the creditors vote on whether to accept the reorganization plan. Finally, the court has to approve the reorganization plan. This long process can take months or even years to complete. During this time, the business is under federal protection from its creditors.
Subchapter V Chapter 11 Bankruptcy Process
Congress passed a new section of Chapter 11 of the Bankruptcy Code, which took effect on February 19, 2020, and intends to make it easier and less costly for businesses to file for Chapter 11. The new “Subchapter V,” which is optional, has most of the same benefits as a typical Chapter 11 case except that the debtor may be able to confirm a plan without creditor votes. A third-party trustee is appointed who may assist the debtor in obtaining a consensual plan, and the debtor does not have to pay quarterly fees to the U.S. Trustee Office. Additionally, individuals may be able to modify a mortgage on their personal residence if the funds were used toward the debtor’s business.
Benefits Of Chapter 11 Bankruptcy
The primary objectives of Chapter 11 bankruptcy are to restructure a troubled business to be more successful following bankruptcy and allow that business to repay its debts while remaining operational. This benefits the business and its creditors because it enables the business to use ongoing revenue to repay debts. In many cases, creditors receive greater repayment under Chapter 11 bankruptcy than under Chapter 7 bankruptcy or liquidation.
At Springer Larsen Greene, LLC, we represent companies of all sizes in business bankruptcy. Our team also includes an acting bankruptcy trustee, a former trustee and a former bankruptcy judge, all of whom offer our attorneys added insight into bankruptcy proceedings. If your business is having trouble repaying its debts, contact us today to discuss your options. We will examine your company’s financials to determine if Chapter 7 bankruptcy, Chapter 11 bankruptcy or a bankruptcy alternative might be the solution.
In Need Of Business Reorganization? We Can Help.
Countless Illinois businesses fall on hard times. However, that doesn’t mean you can’t get out of them. Consult with one of our lawyers throughout the Chicago metro area today by calling 630-912-5871. We’re happy to address any questions or concerns you may have.