Bankruptcy refers to federal laws and guidelines that can assist individuals and organizations with more debt than they can pay by selling assets or setting up a repayment plan. The bankruptcy court is where bankruptcy cases are filed. A bankruptcy lawsuit cannot be brought in a state court because only federal courts hear bankruptcy matters. A chapter 11 bankruptcy lawyer Maryland can help you reduce stress by covering every aspect of the legal process.
The 3 primary chapters of the Bankruptcy Code, Chapter 7, Chapter 11, and Chapter 13, are where most cases are filed.
The Fundamental Goals of Bankruptcy Law
- To provide an honest debtor with a “new start” in life by canceling most of his or her debts. A Chapter 11 filing gives you more freedom and options. It can be employed in real estate situations if you are behind on your mortgage payments but are in a position to make up the difference.
- You may be able to petition for a Chapter 11 bankruptcy restructuring if your debts are even slightly more than the Chapter 13 debt limit.
- A Chapter 11 bankruptcy filing lets you buy time to reorganize and develop a realistic debt repayment plan. Your assets would likewise be safeguarded to the extent permitted by law.
- To pay creditors in a timely way to the degree that the debtor possesses property can be used to do so. Chapter 11 bankruptcy filings have traditionally been reserved for large-scale company restructurings.
Best chapter 11 bankruptcy lawyer Maryland applies the chapter’s debtor-friendly provisions to particular individual consumers to secure a more substantial debt restructure.
When Can You File for Chapter 7 Bankruptcy?
Divorce, lawsuits, and medical ailments are all causes for filing a Chapter 11 bankruptcy. This form of filing is triggered by a loss of income, business failure, or even the loss of a professional license.
The majority of persons who seek Chapter 11 bankruptcy reorganization are professionals or high-net-worth individuals. Many of them have made a good living for a long time but have seen their earnings drop due to career or personal difficulties.
A Chapter 11 filing entails several legal obligations and liabilities. This is especially true for folks who both file and run a business. It’s also quite difficult and time-consuming. Before a bankruptcy case can be filed, there are generally several individual issues that must be resolved. A Chapter 11 bankruptcy will cost you more money than a Chapter 7 or Chapter 13 bankruptcy.
Depending on the facts, the costs vary. However, the savings and convenience of many of these particular reorganizations far offset the increase in fees and expenditures.
Overview of the Bankruptcy Process Under Chapter 11
The Chapter 11 bankruptcy process is divided into various stages:
Filing – There is a lot of paperwork involved in filing a Chapter 11 bankruptcy. On official U.S. bankruptcy forms, you should detail your business earnings, assets, and debts. The automatic stay protects you once you file, and it prevents your creditors from seeking to collect on your debts.
Negotiating with creditors – Because you still have the possibility of filing a Chapter 7 liquidation, which would repay your creditors significantly less, you have some leverage to negotiate a reduction in your obligations to them.
Preparing a reorganization plan – Working with the best chapter 11 bankruptcy lawyer in Maryland lets you devise a strategy that allows you to continue operating your business while returning a portion of your debts to creditors.
Approval of the plan by creditors and the court — You file your restructuring plan with the court. Your creditors will vote on whether or not to approve it, and the court will determine if it is logical and sensible to all parties concerned.
Debt discharge – After the court has approved your reorganization, you can start paying payments. The court will discharge your remaining debt once you have completed your plan’s terms.
Based on the nature of the firm, Chapter 11 bankruptcies can take anywhere from 6 months to 2 years to resolve. An experienced chapter 11 bankruptcy lawyer in Maryland works directly with you to help you get the most out of bankruptcy legislation in the United States.
Final Thoughts
You may restructure your debt and keep your business running by filing Chapter 11 bankruptcy, giving you a chance to weather the storm and eventually become successful.
A chapter 11 bankruptcy lawyer in Annapolis, MD, can assess your circumstances and guide you on the best course of action. It’s critical to get accurate answers from an experienced professional to make informed decisions regarding your company’s future.