Chapter 11 bankruptcy
Chapter 11 Bankruptcy helps businesses restructure debt, protect assets, and regain control. Our expert team guides you through every step toward financial recovery and long-term stability.
We’re Chapter 11 & Subchapter 5 attorneys you can depend on
Dependable Subchapter 5 & Chapter 11 Bankruptcy Lawyers in San Diego
Bankruptcy Law Offices of Mark L. Miller specializes in providing business owners comprehensive assistance with their bankruptcy claim. We are qualified and experienced Chapter 11 and Subchapter 5 bankruptcy attorneys who cater to small business owners across San Diego and California. Contact our offices and our team of attorneys will perform a detailed liquidation analysis and design a realistic and manageable repayment plan. Next, we will prepare your debt reorganization plan to meet the 90-day deadline. Finally, we will provide legal representation at the status conference.
Ready to Start Your Path to Financial Freedom?
Contact us today to schedule a confidential consultation. We’re here to answer your questions and help you take the first step toward a fresh start.
Chapter 11 vs. Sub Chapter 5
Chapter 11 is a bankruptcy that allows businesses to reorganize their debt when facing serious financial difficulties. It offers large corporations an opportunity to restructure their debt by creating a manageable repayment and reorganization plan. Subchapter 5 was added to Chapter 11 bankruptcy in 2019, allowing businesses with less obligations to restructure and repay their debt via less procedural requirements and expenses than a regular Chapter 11.
The main difference is that traditional Chapter 11 remains for companies with debt that exceeds $2,750,000 million. At the same time, the Small Business Reorganization Act of 2019 introduced Subchapter 5 that allows small and large companies with less debt to reap many of the same benefits of Chapter 11. Bankruptcy Law Offices of Mark L. Miller will explain which type of business bankruptcy is best for your situation and help you resolve your financial problems quickly, efficiently, and successfully so your business can continue operating and enter into a repayment plan.
Benefits of Chapter 11
Traditional Chapter 11 brings these advantages:
- Run your business while dealing with debt.
- No restriction on total debt owed.
- Automatic stay prevents creditor harassment, lawsuits, foreclosures, bank levies.
- Must pay U.S. Trustee fees.
- You will get a chance to partially pay back your unsecured debt.
- Restructure your secured debt into lower payments.
- There is no debt in Chapter 11 that is considered non-dischargeable.
- Receive loans at favorable rates for funding your ongoing business expenses.
Benefits of Subchapter 5
Subchapter 5 in Chapter 11 provides the following benefits:
- Continued operations for your business
- Debt must be less than $2,750,000
- Automatic stay prevents creditor harassment, lawsuits, foreclosures, and bank levies.
- No creditor approval
- You are the only party who can submit a reorganization plan.
- There is no need for a disclosure statement.
- A special trustee will offer financial recommendations and advice.
- You can pay your administrative expenses over the duration of your plan.
Get the Bankruptcy Help You Want
Speak with a trusted San Diego bankruptcy attorney today. Call us now or send a message to schedule your free consultation. We’ll guide you through every step and help you find the best path to financial freedom.
Why file bankruptcy under Subchapter 5 in Chapter 11
The Small Business Reorganization Act of 2019 went into effect in February 2020 and offers businesses the relief needed with less costs and procedural requirements. Under this Act, small business owners can reorganize and restructure debts in a less costly process compared to traditional bankruptcy filings. Finally, the Act allows you to streamline the entire bankruptcy process, eliminate some associated administrative costs, and provides debtors the breathing room needed to effectively manage debt.
Most important changes to Chapter 11 bankruptcy introduced with Subchapter 5
The Small Business Reorganization Act has introduced the following changes:
- The total secured and unsecured debts must be under $2,725,625.
- A trustee who will not have a role in the daily operations of your business will be appointed. They will collect and ensure payments are paid to your creditors under the terms of your reorganization plan.
- A status conference will be held within 60 days of filing, unless extended for good cause.
- Reorganization plan is filed within 90 days, unless an extension is granted. A disclosure statement is not required, but you will have to provide an analysis of the asset liquidation value and a projection of how you will make ongoing plan payments.
- Rights of a secured lender and lien on your home may be modified if funds from the loan were used or connected with the business and not to purchase the residence.
- The Act removes the “absolute priority” rule. This means that business owners may keep the equity in their business and use their disposable income to pay down debts over a period of three to five years.
- Administrative expenses may be paid over the duration of the plan.
- Discharge of debts addressed under the repayment plan is granted when you complete payments.
For all additional questions about the changes the Small Business Reorganization Act has introduced, contact Bankruptcy Law Offices of Mark L. Miller.
Do I qualify for Chapter 11 and Subchapter 5
Chapter 11 and Subchapter 5 are bankruptcies designed to help limited liability companies (LLCs), partnerships, and corporations resolve their financial difficulties. However, even individuals who are unable to qualify for Chapters 7 or 13 are able to attempt to file for Chapter 11 in San Diego, as well as Subchapter 5.
Qualifying for Chapter 11 and Subchapter 5 involves formulating your reorganization plan that has to fit two important criteria:
- Your plan has to be structured and developed in good faith, which means it has to be honest and with the best intentions. Courts will carefully review all the paperwork you submit to determine if your plan was created according to these guidelines.
- The plan has to conform to all the applicable laws, court orders, reformed laws, Bankruptcy Code, and Bankruptcy Rules.
Besides creating a plan you will also have to:
- Assist your lawyers in preparing a detailed disclosure statement that contains the state of your financial affairs, list of creditors, and a schedule of liabilities, assets, current expenditures, and income.
- Handle creditors and Proofs of Claim
- Attend the status conference
- Attend the confirmation hearing
This procedure is complicated. Contact Bankruptcy Law Offices of Mark L. Miller. We handle all the vital aspects of a successful bankruptcy claim and ensure you receive a fresh financial start.
Get started with your Subchapter 5 in Chapter 11 bankruptcy in San Diego today!
Reach out to San Diego’s leading Chapter 11 bankruptcy attorneys – your business is too important to wait! To learn more about how the upcoming Small Business Reorganization Act may affect your bankruptcy filing, contact the Law Offices of Mark L. Miller.