What Are The Benefits Of Chapter 11 Bankruptcy?
If you are considering a Chapter 11 bankruptcy filing, you may be wondering about the pros and cons of a reorganization bankruptcy for your business. Our West Palm Beach Chapter 11 bankruptcy lawyers can provide you with more information about the benefits of Chapter 11 bankruptcy in South Florida.
You Can Keep Your Business Open
With a Chapter 11 bankruptcy, as opposed to a Chapter 7 bankruptcy, you can obtain relief from debt while keeping your business open and running. Since Chapter 11 is a type of reorganization bankruptcy, you will develop a debt repayment plan that will allow you to keep the doors of your business open for customers and clients while you are working to repay debts and to catch up with creditors. To be clear, business assets are not liquidated in a Chapter 11 bankruptcy, and businesses do not need to close to go through a Chapter 11 bankruptcy.
Automatic Stay Will Stop Debt Collection Actions
As soon as you file for Chapter 11 bankruptcy, an injunction known as the automatic stay will apply to your case. The automatic stay prevents creditors and debt collectors from taking any new actions to collect debt, or moving forward on any existing debt collection actions.
You Can Sell Assets with Liens
In Chapter 11 bankruptcy cases, business debtors can decide to sell certain assets that currently have liens on them. By selling these assets, you can obtain money to put back into your business and into paying debts associated with your reorganization plan. The bankruptcy court will need to approve any sales for assets that have encumbrances, including assets with liens.
Your Business May Be Able to Adjust Interest Rates
Depending upon your circumstances, filing for Chapter 11 bankruptcy may allow your business to adjust interest rates on certain types of loans.
Ability to Reject Executory Contracts
Chapter 11 debtors can decide whether to accept or to reject executory contracts (such as commercial leases or long-term equipment leases).
Reorganize Business Debts and Develop a Sustainable Business Plan
For businesses that file for Chapter 11 bankruptcy, one of the major benefits or advantages is that your business can reorganize its debts and develop a sustainable business plan moving forward. By reorganizing business debts, your business can catch up on debts owed to various commercial creditors
Avoid Foreclosure for Individuals
While Chapter 11 bankruptcies are largely filed by businesses, it is important to know that the benefits of a Chapter 13 reorganization bankruptcy for individuals are also applicable to Chapter 11 bankruptcy cases. Accordingly, if you are filing for Chapter 11 bankruptcy as an individual because you have too much debt to qualify for Chapter 13, a Chapter 11 bankruptcy filing can allow you to stop a foreclosure and to keep your home, just as a Chapter 13 bankruptcy can.
Contact a West Palm Beach Chapter 11 Bankruptcy Attorney
Many businesses file for Chapter 11 bankruptcy and are able to thrive in the long run. Whether you have questions about the benefits of Chapter 11 bankruptcy for your South Florida business or you are ready to file, one of our experienced West Palm Beach Chapter 11 bankruptcy attorneys can speak with you today. Do not hesitate to get in touch with Kelley, Fulton, Kaplan & Eller for more information about business bankruptcy options in Florida.