Business owners who prefer reorganization over liquidation can achieve this goal by filing for chapter 11 bankruptcy. In this chapter, the business owner acquires a reorganization plan that is similar to that involved in a chapter 13 case. The owner is subject to the same requirements as consumers in which he or she must attend a credit-counseling program before approaching an attorney. If you are a business owner and would like to file this chapter, you should contact the Best Chapter 11 Bankruptcy Lawyer today.
What’s the Difference?
Most businesses and private consumers choose chapter 7 due to income restrictions involved in chapter 13. Chapter 7, however, requires that the owner or consumer undergo liquidation in which assets and properties are sold to settle their debts. In chapter 11, however; the business owner agrees to a repayment plan that requires he or she to submit monthly payments to the court based on their profits for the last six months. The difference between chapter 11 and 7 other than its structure is that the business owner may continue to operate his or her business during bankruptcy. If this chapter interests you, it’s advisable to call the Best Chapter 11 Bankruptcy Lawyer for further advice.
Chapter 11 is not as restrictive as other bankruptcy chapters, although a trustee is assigned to oversee the operations of the company. The claimant can acquire new financing through lenders by offering them ownership of business profits instead of the court. The business owner acquires the same automatic stay that consumers receive during chapter 13, which prevents legal action against them. For instance, if the property used for their business is financed through a mortgage, the lender cannot seize the property as long as it is protected through bankruptcy.
Chapter 11 is available for consumers, business owners, and enterprises. It provides more benefits than chapter 13 in that the company could undergo restructuring to eliminate common problems with their finances. It allows the owner to continue to generate business profits without a hindrance, although the trustee monitors their incoming earnings. If you would like to learn more about this chapter, you should hire the Best Chapter 11 Bankruptcy Lawyer available through Law Margulies today.