King & Snohomish County Washington Chapter 11 Bankruptcy Attorney
Chapter 11 is a reorganization bankruptcy that allows a debtor, usually a business, to remain in possession, continue to operate, and possibly borrow new money with court approval, and business owners will want to have a Lynnwood bankruptcy lawyer help with filing for Chapter 11. After a proposal for a plan of reorganization, creditors will vote on the plan, and a court will confirm it when the plan gets the necessary number of votes and satisfies other legal requirements.
Just like Chapter 7 or Chapter 13 bankruptcy cases, a Chapter 11 petition will create an automatic stay that immediately prohibits all collection efforts by creditors. This means that creditors will no longer be able to pursue payment requests, evictions or foreclosures, bank levies, property seizures, or other collection processes against a business.
Chapter 11 is much rarer than Chapter 7 or Chapter 13 cases, with U.S. Bankruptcy Courts statistics showing only a couple hundred Chapter 11 cases compared to hundreds of thousands of Chapter 7 and Chapter 13 filings. Chapter 11 is ideal for businesses that want to keep operating but need more time to restructure their finances to pay their bills.
While Chapter 11 is often done voluntarily, it may be forced on a business when three or more creditors file a petition with a bankruptcy court. A repayment plan will basically serve as a contract between the debtor and the creditors that define how a business will continue to operate while paying its financial obligations. Most repayment plans also include some sort of downsizing that reduces expenses and frees up assets.
There will be three classes of creditors (priority, secured, and unsecured) who vote on a reorganization plan for approval by the bankruptcy court, and when a plan includes a schedule that has some claims not paid in full or when they were originally due, at least one class of the creditors will have to vote in favor of the plan. Should a plan be rejected, then the business or individual can ask for a “cram down,” in which they seek a judge forcing creditors to accept it.
Call Us Today to Schedule a Free Consultation with a King or Snohomish County Chapter 11 Bankruptcy Lawyer
Do you need help filing for Chapter 11 for your business? Bountiful Law knows how to handle these types of cases and can make sure that you are able to get the financial relief you need.
Our firm is aware of how difficult the bankruptcy process can be when it involves a business rather than a person, and we will make every effort to ensure that you can achieve all of your goals. You can call 425.775.9700 or contact us online to receive a free consultation that will allow us to take a longer look at your case and go over everything that you will be able to do.