San Diego Bankruptcy Lawyer

Chapter 11 for businesses and high-debt consumers

A Chapter 11 bankruptcy is a form of debt reorganization and payment that is approved and overseen by a court. Most individuals don’t need a Chapter 11. Talk to an attorney. If your corporation is in trouble and needs bankruptcy, it must be represented by an attorney anyway. If you as an individual (not a corporation) are making ends meet and have little bit of money left over, even a couple hundred dollars, but yet you have over $1,030,000 in secured debt or $336,000 in unsecured debt, you cannot file a Chapter 13. It’s going to be either 7 or 11. How do you know which chapter works for you, or for you company? Don’t expect to figure this out on a search engine. Get real legal advice from a competent attorney. Lots of times you can get answers to these questions for free.

Chapter 11 is for troubled companies that wish to continue operating, and for individuals who have more debt than allowed in Chapter 13. These “debtors” must prove to the court that the debtor is capable of generating revenue to eventually pay off part or all of its debts. Going with a Chapter 11 makes it possible for a company to remain in operation, and hopefully become profitable in the future.

Chapter 11 makes it possible for the company or consumer to hold on to some current assets, especially those that are considered essential to the core operation of the business. If the court – and creditors – agrees with you that Chapter 11 is right, the court will approve a reorganization plan that allows the business to continue operations. Often creditors get to first vote on the “plan”.

Chapter 11 bankruptcies require a high level of legal expertise to successfully implement. Only a handful of bankruptcy lawyers do Chapter 11 cases in San Diego. If you think this is something you need to consider, call us for a Bankruptcy Option Assessment. It’s the only way to really know where you stand.