Call Us: (480) 464-4667
Mesa Phoenix Arizona Chapter 11 Bankruptcy Attorneys: Introduction
As a Mesa Phoenix Arizona Chapter 11 bankruptcy attorneys, we assist clients through the Chapter 11 reorganization process. What follows is a brief explanation of Chapter 11. There are many aspects to filing a Chapter 11 and this only provides direction. It is best to set an appointment to determine what makes the most sense for your business or family.
Phoenix Chapter 11: Why file for Reorganization?
A Reorganization chapter of bankruptcy is created for the purpose of either reviving a business or to sell what is left for the benefit of the creditors. Chapter 11 is important because the purpose is to salvage a family or business that otherwise would lose all of its value to a few creditors who are the most aggressive. This allows either time to get the situation fixed or an opportunity to sell assets of the business.
Arizona Bankruptcy: What do I need to file Chapter 11?
First, we meet to discuss whether Chapter 11 makes sense and, if it does, then we begin to collect inventories, asset lists, debts, recent financial dealings with all entities. This information makes up the Bankruptcy Petition and Schedules.
After gathering the documents, and the documents are signed, we file the paperwork with the Court. This is important because from that moment forward, as long as you stay in Chapter 11, your assets cannot be taken or used without the Court’s permission. The law that protects your assets is the automatic stay and is found in 11 U.S.C. 362.
Mesa Arizona Bankruptcy: What is a Plan of Reorganization?
How does a Plan of Reorganization work? This is one of the major reason reason to hire an attorney. An experienced attorney will help develop a Plan that will provide the Debtor, not just a way into bankruptcy, but a way out of bankruptcy as well.
Do I have to pay every penny back? This is a valid question and it depends on your circumstance. There are a number of factors but in a number of cases you don’t have to pay back every penny. Again, this is why experienced Mesa Phoenix Arizona Bankruptcy Attorneys are helpful.
In order to file the Plan of Reorganization, you must file a Disclosure Statement. The Disclosure Statement provides information to your Creditors to understand your financial position and whether reorganization is a viable option.
For the most part, any income or property acquired during a Chapter 11, is property of your bankruptcy estate. This means that while you are in bankruptcy, you are required to commit any income and assets to your creditors to justify the forgiveness of debt. This can be confusing and Lawyers are helpful through this process.
It is often thought Chapter 11 Bankruptcy is reserved for large corporations seeking to reorganize. In fact, Chapter 11 Bankruptcy can be a valuable tool for small business as well as individuals.
Mesa Phoenix Arizona Chapter 11 Bankruptcy Attorneys:
Different Types of Chapter 11 Cases
As Phoenix & Mesa Arizona Bankruptcy Attorney, I can explain the different types of Chapter 11 cases:
Chapter 11 for Individuals:
Chapter 11 is a chapter of bankruptcy that provides a way to reorganize an individual by reducing secured debts to fair market value. This is also known as a cram-down. For instance, if you own a rental property worth $100,000 and your liens amount to $300,000, you can cramdown the property and pay $100,000. Any amounts crammed down would be paid its pro-rata share along with the other remaining unsecured creditors. This can be a powerful tool in assisting an individual or family get control of their finances.
In today’s economy it is common for an individual to hold multiple rental properties, which are losing value at a rapid rate. Chapter 11 Bankruptcy can offer a chance for the individual to reduce the loan amount down to the fair market value of the property and in some cases achieve a better interest rate. In turn, the investment property can return to being an asset to an individual by not only offering cash flow by way of rents, but a chance to regain value when the market begins to correct itself.
Chapter 11 for small business:
There are many reasons a small business may need the protection of Chapter 11 Bankruptcy; lawsuits, dissolution of a partnership, SBA loans unwilling to offer deferment, and often trust tax liability. Through Chapter 11, these liabilities can be managed through a repayment plan while providing the business owner(s) the ability to continue to operate the business and pursue new paths of revenue to grow the business, in turn creating a feasible reorganization.
We at James Portman Webster Law Office PLC, understand the nuances of Chapter 11, and have successfully confirmed Chapter 11 Plans for our clients.
I look foward to assisting your family and/or business through the process. Call for a free consultation: 480-464-4667.