Chapter 11 Bankruptcy Information
Dallas – Fort Worth – North Texas Chapter 11 Bankruptcy Lawyer
When considering chapter 11, many recall the chapter 11 bankruptcies of General Motors, American Airlines and the Texas Rangers. In reality, many chapter 11 cases are filed by small to medium sized businesses, and individuals. Chapter 11 allows businesses and individuals to restructure their obligations, and is typically used by corporations, partnerships and high net income/ high net worth individuals to reorganize debts. In many instances chapter 11 can be used to reduce or eliminate unsecured debt such as credit cards and lines of credit, and in some cases chapter 11 filers can use chapter 11 to reduce the balances on debt secured by equipment, non-homestead commercial real estate and other assets.
Businesses can use chapter 11 to continue to operate and do business using the protection of the automatic stay while reorganizing debt and restructuring operating expenses. The process can allow a business to restructure debt and expenses to help ensure the future viability and success of a business. Chapter 11 is commonly used by corporations, partnerships, LLCs, and sole proprietorships to restructure and reorganize.
Chapter 11 can also be used by individuals with high net worth, high income, or who are self employed or own their own businesses to reorganize when chapter 7 or chapter 13 is not a feasible option. Unlike chapter 13, which limits reorganization plans to five years, chapter 11 plans can extend beyond 5 years if necessary to restructure large debts. In addition, chapter 13 contains debt limitations which prevent some individuals from filing under chapter 13. Chapter 11 does not contain debt limitations and can be used to by individuals who do not qualify for chapter 13 to restructure their debt. Chapter 11 can allow individuals with significant non-exempt, non-homestead property keep the property while reorganizing. This can be especially useful for individuals who own commercial real estate, rental properties, mineral royalty interests or significant personal real estate to protect their assets.
Once chapter 11 is filed, whether for a business or an individual, an automatic stay takes effect which prevents creditors from taking most collection actions and gives the business or individual breathing room to reorganize. The automatic stay stops actions such as collections, lawsuits, repossessions, foreclosures, garnishments, and writ of attachments. The automatic stay is a powerful tool for allowing restructuring and stopping a “race to the courthouse” by creditors.
Businesses and business owners frequently find themselves behind on income taxes, payroll taxes, sales taxes and other types of taxes. While most tax debts are not dischargeable, chapter 11 can be used to restructure the repayment of tax debts while the business continues to operate. Repayment of taxes can often be extended over a 5 year period, resulting in repayment options more affordable than repayment plans offered by the IRS or other taxing authorities.
As with any bankruptcy, the decision to file bankruptcy should be guided with the assistance of an experienced attorney. This is especially important when considering chapter 11, because under some circumstances chapter 11 can result in the change of ownership in a business or create an opportunity for creditors to take over a business.
We have multiple offices throughout Texas, including offices in the DFW Metroplex and North Texas.
For additional information about us and the benefit of retaining our services for a Chapter 11 bankruptcy, please visit the Benefits of Retaining Bailey & Galyen page.
Contact a Texas Chapter 11 Bankruptcy Lawyer Today
If you would like to obtain additional information about Chapter 11 bankruptcy for yourself or your business, explore your options, learn about the bankruptcy process or discuss your particular situation with an experienced Texas bankruptcy attorney, please schedule a free initial consultation by calling us toll free at 844-402-2992. If you prefer, you can also fill out our intake form and we contact you to schedule a consultation.
We provide affordable payment plans for fees. For additional information about personal bankruptcy, please visit our Personal 11 Bankruptcy Information page as well as our General Bankruptcy Information page.
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