Rochester Hills Chapter 11 Bankruptcy

Chapter 11 bankruptcy is an option for individuals, corporations, and partnerships.  Unlike other types of bankruptcies, there are no limits on the amount of debt you must have to file for Chapter 11 bankruptcy (except for small businesses).  Randall L. Shepard has been practicing law in Michigan for more than 25 years and can help you understand how Rochester Hills Chapter 11 bankruptcy can benefit your situation.

Is Chapter 11 right for you?

Because of the expense involved, the types of people who generally file Chapter 11 are large corporations and wealthy individuals.

Chapter 11 allows a business to stay in operation by reorganizing finances and restructuring to pay off debt.  When a business (a corporation, partnership, or sole proprietorship) files under Chapter 11, the owner takes the role of debtor in possession.  A debtor in possession has basically the same monetary responsibilities as a bankruptcy trustee, but has no investigative functions.  Duties for the debtor in possession include:

• Accounting for property
• Examining and objecting to claims
• Filing court required informational reports
• The court approved right to hire professionals (accountants, attorneys, appraisers, auctioneers, etc.)
• Filing tax returns

Businesses have 120 days to file a plan that describes how the business intends to pay creditors.  Unlike a Chapter 7 or Chapter 13 bankruptcy, a Chapter 11 bankruptcy may continue for years.  However, creditors may also file a repayment plan that opposes the debtor’s plan and requests a different payment schedule.  Competition between plans often influences the debtor to create a timely plan.

Creditors may also force a company into involuntary Chapter 7 or 11 bankruptcies through the bankruptcy court.

Small businesses follow different guidelines for Chapter 11 bankruptcy

The requirements for small business Chapter 11 bankruptcy include:

• The small business deals in commercial business (not just real estate owners).
• There is no creditors committee.
• The creditor committee is too inactive to deal with the case.

Trustees maintain close oversight in a small business Chapter 11 bankruptcy to determine quickly whether or not the debtor can confirm a plan.  Small business cases also move through the bankruptcy process faster than large company cases.  The exclusivity period where only the business debtor may file a plan is generally 180 days, but can be extended to 300 days.  By comparison, larger businesses may extend the exclusivity filing period up to 18 months.

Find out more about a Rochester Hills Chapter 11 bankruptcy

Discuss Chapter 11 bankruptcy with an experienced Rochester Hills bankruptcy lawyer.  Call 248-841-8772 or use our online form and contact Randall L. Shepard today.