The attorneys of The Law Office of DeCaro & Howell, P.C., represent businesses and individuals throughout Maryland, Virginia and the District of Columbia in Chapter 11 bankruptcy proceedings. We combine experience, professionalism and advocacy in every case we handle.
Chapter 11 Process Overview
Although each stage in the process has its own nuances and complications, the general procedure looks like this:
- Initial consultation and planning: The first step is to meet with an attorney and begin planning for your bankruptcy. We will help you determine whether Chapter 11 is the right choice for your business or personal situation. If yes, we will prepare all of the financial and legal documentation needed to get started.
- Filing for Chapter 11: The process really begins once you have filed for Chapter 11. At this point, debt-collection activities must cease against you, and we begin working with the courts and your creditors.
- Negotiating with creditors: Once the process is started, we work with the creditors to come to agreement on reduced principles, restructured payment plans and other creative options to satisfy the outstanding debts.
- Obtaining court approval: For repayment plans to become official and operative under a Chapter 11, the court needs to approve the plans.
Although most Chapter 11 bankruptcies are obtained by business entities, if you are an individual with too much debt to qualify for a Chapter 13 and too high of an income level to qualify for a Chapter 7, a Chapter 11 might be the right fit for you.
A Chapter 11 Bankruptcy is a proceeding where the debtor (yourself or your business) proposes a plan of reorganization. The creditors all vote on this plan, and if a sufficient number of creditors holding a sufficient balance of debt vote to accept the plan, then the terms of the plan override any inconsistent obligation to pay off your creditors. For example, if you have $1,000,000 in creditor debt, and your situation would allow you to make payments of $100,000 at the rate of $2,000 per month toward this debt, then you may be able to secure a confirmed Chapter 11 Bankruptcy plan reducing your debt and providing a period of time within which to pay off the reduced amount. The realistic ability to secure such a plan depends on a large number of interrelated factors. We are here to review your situation and discuss the feasibility of seeking a Chapter 11 Bankruptcy plan which meets the legal requirements for court approval.
Of course, getting from the point where debts are out of control to the point where you have secured a confirmed Chapter 11 Bankruptcy plan requires extensive analysis, a thorough understanding of the bankruptcy rights of mortgage holders, tax creditors, judgment and trade creditors as well as yourself or your business, and the ability to craft a plan which can be approved by the court based on your particular circumstances.
Although it is not a situation which is favored, you may be able to propose a plan which meets certain legal requirements even if your creditors do not vote to accept the plan. This situation is the so-called “cram down” where the court decides that the plan you propose is equitable and that it provides the creditors with the best overall result on the basis of your situation.
The decision whether to file a Chapter 11 Bankruptcy for yourself or your business is generally driven by the following primary considerations:
- Does the business have assets which are worth preserving from creditor claims?
- Does the business have the ability to generate enough revenue, either through operations, borrowing, sales of unneeded assets or a combination of these sources, to be able to propose a confirmable Chapter 11 Plan which will either be accepted by the creditors or confirmed by the bankruptcy court as a so-called “cram down”?
- Is the intent to sell some or all of the business assets without creditor interference?
- Do you want to reorganize your finances, keep your home and provide for certain payments (such as tax debts) but you don’t qualify to file under Chapter 13?
Contact Our Attorneys Today
For businesses and individuals considering a Chapter 11 bankruptcy: Do not delay. Your situation will almost certainly not improve by waiting, and getting information from an experienced lawyer can help you see the situation clearly and make good decisions.
We offer free initial consultations, so there is no financial risk in talking with our legal team. Our consultation involves a basic but comprehensive review of your situation and a discussion of the available alternatives.
Call us at (301) 882-2585 or fill out our online contact form to schedule your free initial consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
