Chapter 11 Bankruptcy in Flint Helps Businesses Survive Financial Difficulties
Bankruptcy attorneys save struggling Michigan commercial enterprises through debt restructuring
If you own a business, you can sometimes face daunting problems that cause income to decline and debts to pile up. Recession, local economic change, increased competition and other adverse factors can take a toll on your bottom line. Even if it seems that the problems are insurmountable, don’t rush to close your doors. At the Flint Bankruptcy Law Office of George E. Jacobs & Associates, we can assist you in reorganizing your debt and staying in business while you get back on a strong financial footing. Filing for Chapter 11 bankruptcy can help your business survive and start to thrive again.
What is Chapter 11 bankruptcy?
In a Chapter 11 reorganization, your business’s debts are restructured so that a sizable part of them can be paid off in accordance with a plan approved by creditors and confirmed by the bankruptcy court. All or most of your remaining debts are discharged at the completion of the plan, which means you don’t owe them anymore. Chapter 11 is different from Chapter 7, in which assets are liquidated and the business shuts down. A simplified version of Chapter 11 designed for small businesses is called Subchapter V. We can explain both versions in depth, determine which is the right choice for you and guide you through the process.
How Chapter 11 bankruptcy works
A Chapter 11 begins with filing a petition, which includes all relevant information about your business’s finances and debts. A trustee is appointed, who must approve any major business decisions, such as selling assets, making or breaking contracts or closing or expanding business operations. After an initial meeting with the trustee and creditors, you propose a debt restructuring plan, which may include such features as partial payments, reduced interest and extended repayment schedules. Creditors may file objections and/or proposed modifications to the plan. The court, before confirming the plan, will consider whether it is feasible, is made in good faith, is in the best interests of creditors and is fair and equitable. At least some of the creditors must approve the plan, which might require negotiation, but the court can confirm it over any holdouts’ objections. Once the plan is approved, you must make the payments according to the priorities set forth in the plan. Most remaining debts are dischargeable at the end of the process, although some, like taxes, might not be. Even if some debts aren’t discharged, your business is likely to be in a much better financial position.
If we represent you in a Chapter 11 proceeding, we will explain every step of the proceeding, draft and negotiate a plan you can live with, get the court’s confirmation and help you complete the repayment process. We can also determine if you qualify for Subchapter V reorganization, which is simpler and less expensive.
What rights do you have in a Chapter 11 bankruptcy?
As soon as you file for Chapter 11 bankruptcy, an automatic stay goes into effect, requiring your creditors to stop all efforts to collect their debts except through the bankruptcy court. They must stop calling you and must deal with your attorney instead. If they have initiated a collection lawsuit, it must be put on hold. You may continue to operate your business throughout the bankruptcy proceeding, unless the trustee decides you have acted fraudulently or in bad faith. You are the only one entitled to submit a restructuring plan within the first 120 days after filing. Your creditors may submit their own plans once that period expires. As your counsel, we will fully explain your rights as a debtor and enforce them if they are challenged or disregarded by anyone.
Contact an experienced and knowledgeable Chapter 11 bankruptcy attorney
The Flint Bankruptcy Law Office of George E. Jacobs & Associates can help you decide whether a Chapter 11 bankruptcy is right for you and whether you qualify for Subchapter V small business reorganization. Call at 810-275-0608 or contact us online to set up a free initial consultation.