Handling San Bernardino Business Bankruptcy
The recent downturn in the credit market has caused severe financial difficulties for many businesses that would otherwise be perfectly solvent. While filing for bankruptcy as a business entity is never an easy choice, it may be the best solution when it comes to getting a fresh financial start. If your business can be saved through a restructured payment plan, Chapter 11 bankruptcy may allow you to emerge from your financial trials as a stronger, more viable company.
Chapter 11 Bankruptcy in San Bernardino County
Chapter 11 bankruptcies can be compared to an individual’s Chapter 13 bankruptcy, but there are several key differences that apply to business bankruptcies that do not apply to individual bankruptcy. One of the major differences is the fact that in a Chapter 11 bankruptcy, your creditors have a chance to approve your suggested repayment plan, whereas, in a Chapter 13 bankruptcy, the repayment plan is approved by the court, without a creditor approval requirement. If you file for Chapter 11, you must be prepared to produce detailed lists of your assets, liabilities, and financial situation in general. Additionally, you will have to pay off 100% of debt owed to priority creditors and those entities to which you owe a secured debt.
The approval process for a Chapter 11 bankruptcy has a 2/3 approval requirement in terms of monies owed rather than the actual number of creditors. This means that if you owe a sizable debt to one entity, the approval of that entity weighs more than the approval of an entity to which you owe only a small or marginal amount. This means that your plan can pass without a majority vote in terms of the number of creditors you have. If you come up with a plan that is fair to all creditors equally, and that provides at least as much repayment as individuals would receive under a Chapter 7 filing, the court may approve your plan without the 2/3 majority approval needed.
Another key difference in Chapter 11 bankruptcy is the fact that in some instances, you may act as your own trustee. This means that you will be responsible for making the payments to your creditors as outlined in the repayment plan. The courts will expect to see documentation proving your payments, and if you do not carefully manage the repayment plan, you may lose your right to serve as your own trustee.
Chapter 11 bankruptcy requires a lot of planning, and the requirements involved can be confusing, or even overwhelming for someone who is already dealing with the stress of excessive debt. This is why it is so important to hire a reputable San Bernardino County Bankruptcy Attorney at the start of the process. Our firm can help you to navigate the complexities of Chapter 11 bankruptcy, and can keep you informed of the process every step along the way. Additionally, our firm’s expertise in San Bernardino Bankruptcy Law allows us to give solid legal advice in the event that there are complications, such as a Chapter 11 filing triggering the need to file a Chapter 7 as well.
If you are considering filing for bankruptcy for your business and don’t know where to start, or if you need more information before you can make a decision, don’t wait. Contact us today and arrange for a free initial case evaluation as soon as possible. Swift action may be able to save your business and let you recover your financial solvency over time.