What is Bankruptcy Chapter 11
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy (although liquidation can go under this chapter), while Chapter 13 provides a reorganization process for the majority of private individuals.
Companies choose to file Chapter 11 because its long-term revenues will be higher than the liquidation value of the assets. This way, creditors can get more money back if they allow the debtor business to reorganize and work out a payment plan. The business becomes a debtor in possession, maintaining control and ownership of their assets and continuing their regular operations. At this point, there is usually no trustee.
A company that declares Chapter 11 must disclose all of its assets and make a list of all the debts that it is seeking protection from. This is the creditors’ right to question the debtor, a fundamental part of bankruptcy law. In cases involving millions or billions of dollars, this step alone can be incredibly complex. The creditors also meet with the debtor.
How We Help Our Clients
We Legal, APC offer Corona resident’s honest, easy-to-understand legal advice. We provide professional bankruptcy advice with patience and understanding during this stressful time, with the full realization of how important this event is. Corona residents in need of a bankruptcy attorney can contact the firm for a free initial consultation with no further obligation.
Speak With A Bankruptcy Attorney
Effective legal representation is often the only thing standing between catastrophic consequences and a satisfying outcome. Our chapter 11 bankruptcy attorney in Corona are committed to fighting for your rights and future; contact us at (877) 674-1021 to book your free consultation.