Chapter 11 is frequently known as the reorganization chapter of the bankruptcy code because it allows a debtor to reorganize financial obligations while retaining assets, generally through the sale of certain assets to pay down debt and refinance existing debts. Filing a Chapter 11 bankruptcy petition grants a debtor an automatic stay from enforcement action and precludes creditors from continuing collection efforts. Chapter 11 is available to both individuals and businesses.
Bankruptcy under Chapter 11 of the Bankruptcy Code is often referred to as "business reorganization." Chapter 11 allows qualified individuals and businesses to reorganize their obligations and pay their debts over time. Businesses that choose to take advantage of Chapter 11 bankruptcy relief continue to operate their business while paying their debts. Our chapter 11 bankruptcy attorney in San Antonio, TX can help you through this process.
Once the debtor files its Chapter 11 petition, an "automatic stay" goes into effect which prohibits the business' creditors from making any attempt to collect their debt, including attempting foreclosure and repossession. The also debtor files various written "schedules" and "statements" to inform the Court of its outstanding debts, its current revenue and expenses, any existing contracts, any current or potential lawsuits, and any recent asset transfers. The debtor normally then has 120 days to propose a repayment plan to the Court. Under Chapter 11 Bankruptcy, the creditors are able to vote on the debtor's proposal. It can take anywhere from six months to a year or more before a repayment schedule is approved and in place. Under the schedule, the debtor must generally pay all tax obligations and secured debts in full, plus interest, and at least a portion of unsecured debts. Once approved, the debtor may have up to six years to repay its obligations.
Chapter 11 bankruptcy is very complex, time consuming, oftentimes expensive and allows the Court and the creditors to be actively involved in the debtors' financial affairs. Businesses considering seeking bankruptcy relief under Chapter 11 should contact a San Antonio Bankruptcy Attorney experienced in handling Chapter 11 bankruptcy cases.
Let San Antonio chapter 11 bankruptcy attorney David T Cain assist your business with restructure, reduction or postponement of business debt.
We also handle Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.