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Southfield Chapter 11 Lawyers

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Chapter 11 bankruptcy, often recognized as reorganization bankruptcy, offers a viable pathway for businesses and individuals overwhelmed by substantial debts to restructure their financial landscape while continuing their operations. This form of bankruptcy is particularly distinctive because it allows the debtor to retain control over their business operations as a debtor in possession.

In this form of bankruptcy, the debtor proposes a reorganization plan, which must be detailed enough to gain approval from the affected creditors through a voting process. Once the court confirms the plan, the debtor must make payments according to the plan's terms and adhere strictly to its provisions, paving the way for financial recovery and stability.

Businesses typically use this type of bankruptcy to reshape their financial commitments and sustain their operations. However, it's also accessible to individuals whose debts surpass the limits allowable under Chapter 13 bankruptcy. It provides a mechanism to manage substantial debt loads without liquidating their assets.

At Goldstein Bershad and Fried, PC, we help clients navigate the complexities of Chapter 11 filings. Our team is deeply knowledgeable in bankruptcy law, offering thorough and honest discussions about the available options. We pride ourselves on providing personalized attention, giving each client one-on-one guidance throughout all phases of their bankruptcy case.

If you are considering Chapter 11 bankruptcy and need legal advice in Southfield, call our attorneys at (248) 213-7888 or contact us online to schedule a consultation.

Who Can File for Chapter 11?

Chapter 11 bankruptcy accommodates diverse debtors, from large corporations to individual entrepreneurs, providing a structured way for managing substantial debts. Understanding who qualifies and the specific conditions they must meet is crucial for any debtor considering this option.

Those eligible to file for Chapter 11 include the following:

  • Corporations. When a corporation files for Chapter 11, the personal assets of its shareholders are typically shielded from risk. The bankruptcy concerns only the assets and debts of the corporation, allowing it to restructure its obligations without affecting the individual financial stability of its stockholders.
  • Sole proprietorships. Unlike corporations, sole proprietorships do not have a legal distinction from their owner. Therefore, a Chapter 11 filing by a sole proprietor involves personal and business assets. This amalgamation means that the individual's entire financial landscape is subject to the bankruptcy process.
  • Partnerships. Partnerships may file for Chapter 11, but there is a significant risk that partners’ personal assets might be used to satisfy business debts, depending on the partnership's liability structure.
  • Individuals. Chapter 11 becomes necessary when an individual’s debt levels exceed the limits set for Chapter 13 bankruptcy. These limits are subject to periodic adjustments, but the essence remains that Chapter 11 is suited for managing higher volumes of debt.

It's imperative for all potential filers, whether businesses or individuals, to avoid incurring additional debt just before filing for bankruptcy. They must show that they have ceased acquiring new debts and have a viable plan to meet existing financial obligations through their reorganization strategy.

Advantages of Chapter 11 Bankruptcy

Chapter 11 bankruptcy offers several significant advantages for businesses and individuals facing overwhelming financial challenges.

A few of the benefits include the following:

  • Continuation of business operations. One of the cornerstone benefits of Chapter 11 is that it allows the debtor to maintain control over their business as a "debtor in possession." This status grants the debtor the authority to operate the business during bankruptcy under the court's oversight. As a fiduciary, the debtor must perform duties akin to those of a trustee, which includes accounting for property, filing operational reports, and making certain business decisions only with the court's approval.
  • Opportunity to restructure debts. Chapter 11 provides a flexible framework for restructuring debts and assets. The restructuring is vital for correcting the business's financial course and achieving a sustainable operating model. The debtor proposes a reorganization plan, which may include renegotiating terms with creditors, downsizing operations to reduce expenses, or reallocating resources to more profitable segments. The goal is to create a more favorable financial structure that supports the debtor’s ability to meet new, more manageable payment terms, thereby enhancing the business's capacity to generate profit and growth.
  • Potential to avoid asset liquidation. Unlike other forms of bankruptcy, Chapter 11 typically offers a way to avoid the wholesale liquidation of assets. This advantage is significant for businesses that possess valuable non-liquid assets essential to their operations. By restructuring debts and possibly downsizing aspects of the operation, the company can retain critical assets and continue generating revenue, which is often preferable for the debtor and the creditors involved.

The Role of a Bankruptcy Attorney in Chapter 11

Navigating Chapter 11 bankruptcy requires understanding the law and a strategic approach to reorganization and debt management. At Goldstein Bershad and Fried, PC, our attorneys guide clients through this complex process, leveraging over a century of combined legal experience to provide dynamic solutions tailored to each client's unique circumstances.

Our lawyers help clients design plans to maximize their ability to maintain business operations while meeting the legal requirements for creditor approval. We are skilled in negotiating terms that aim to satisfy debtor and creditor needs, making the plan feasible for long-term compliance and stability.

Discuss your situation with a Southfield Chapter 11 lawyer by calling (248) 213-7888 or sending an online message to learn more about your options.

Why Work With Goldstein Bershad and Fried, PC?

We Have a Trusted & Proven Track Record of Success
  • 1 On 1 Attention

    You will be in direct and continuous communication with the attorney working your case.

  • 100+ Years of Experience

    We have a reputation of excellence and are an AV-rated law firm through Martindale-Hubbell.

  • Full-Service Practice

    We also provide individuals and businesses with other non-bankruptcy alternatives and financial solutions.

  • Creative Solutions

    We represent debtors and creditors, capable of viewing debt issues from every angle.

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