Filing a Chapter 11 Bankruptcy

Memphis Bankruptcy, Social Security Disability & Long Term Disability Attorney

Filing bankruptcy can feel like an overwhelming and stressful experience. It is important to know what you should do with your finances and what bankruptcy can do for you and your business. If you are feeling lost and wondering what bankruptcy can offer you, your family, and your business, a Chapter 11 bankruptcy attorney may be able to help you navigate through your bankruptcy filing. 

If you are unfamiliar with the Chapter 11 process, we may be able to help. John Dunlap is an experienced attorney that has helped many individuals and businesses with their bankruptcy cases. You don’t have to face your finances alone. Call today for a free 30 minute session to discuss your financial situation. 

How to File Bankruptcy Chapter 11

If you’re not familiar with the different types of bankruptcies, you may be wondering what Chapter 11 bankruptcy means and if it’s right for you and your business. If your business is unable to make bill payments or your personal finances as a business owner make it difficult to pay bills, a Chapter 11 bankruptcy may be a solution. If you have found yourself looking for a debt relief solution to your business, Chapter 11 bankruptcy may give you everything you’re looking for. 

The definition of a Chapter 11 bankruptcy is known as a plan of reorganization to pay down and reorganize your debts.  Often, your business can stay in operation during your bankruptcy process. 

The Chapter 11 bankruptcy process usually includes:


      • Filing a Petition: The Chapter 11 process usually begins by filing a Chapter 13 petition, where you will list your business’s assets, debts, income and expenses. After you have checked through all of your businesses financial records, you can file the petition through the bankruptcy clerk’s office. Once your petition is filed, you will fall under the automatic stay, which stops creditors from contacting you. 

      • Meeting of Creditors: Like other bankruptcies you may be familiar with, debtors filing a Chapter 11 will be required to attend a meeting of the creditors where you may be asked questions about your bankruptcy petition.


        • Reorganization Plan: You propose a plan of reorganization and repayment to your creditors. You present a disclosure statement and reorganization plan to your creditors outlining your financial affairs and how your creditors play a role in the bankruptcy.

        • Confirmation Hearing: Once you outline your reorganization plan, a judge will hold a confirmation hearing where they will either approve or disapprove your proposed plan.

        • Payments: If your reorganization plan is approved you will start making payments according to the details in your plan. 

        • Discharge of debts: After your bankruptcy period is over and all of your unsecured debts have been paid, you will be finished with your Chapter 11 bankruptcy.

      Dealing with bankruptcy as a business owner can make you feel lost. An experienced attorney may be able to help you with what to watch out for and can take on your bankruptcy on your behalf. Working with a Chapter 11 bankruptcy attorney may also provide you with tools to be able to maintain some of your business and credit at the same time to allow your business to still operate

      One of the most crucial parts of your Chapter 11 is your reorganization plan. Working with an experienced attorney like John Dunlap can help you better take advantage of a Chapter 11 and keep your business running. Contact us for a free 30 minute consultation about filing for Chapter 11.

      Can I stay in business after filing Chapter 11?

      One of the biggest benefits to filing Chapter 11 is that you can stay in business while you reorganize your debts. This gives you time to keep your business open while you restructure your finances to pay back any debts that you may owe.

      However, even though as a Chapter 11 debtor in possession you may be able to stay in business during your bankruptcy period, you may lose control of business and financial decisions that can be decided by the bankruptcy court. Bankruptcy courts may have control over decisions including mortgages, sales of assets or property, lease agreements, business expansions, and more. 

      Not knowing what you will and will not have control over can be frightening but John Dunlap may be able to help. Having an attorney in your corner may benefit you during your bankruptcy period and John Dunlap may be able to help you understand what you can and cannot control during the repayment plan period. 

      Is Chapter 11 just for businesses?

      Chapter 11 is commonly known as big business bankruptcy, because it is usually filed by corporations, partnerships, or limited liability companies. However, you can file a Chapter 11 bankruptcy if you own a small business and in some cases you may choose to file Chapter 11 as an individual as well.

      Individuals may file for Chapter 11 bankruptcy if they do not qualify for Chapter 7 or Chapter 13. It is usually unlikely to file Chapter 11 bankruptcy voluntarily if you’re not a business but if you are in the middle of a bankruptcy case, there may be options for you. However, the process of Chapter 11 may change slightly depending on your unique situation. 

      If you’re filing a Chapter 11 as an individual and not as a business, you may be required by bankruptcy laws to take a credit counseling course before filing a petition. 

      How long does Chapter 11 take?

      Unlike other bankruptcies, Chapter 11 doesn’t have an outlined period. Many Chapter 11 bankruptcies take anywhere between six months to two years to complete. 

      Fortunately, there is not a set time limit on the repayment plan which gives you enough time to pay down your debts. 

      If you’re curious how long a Chapter 11 bankruptcy will take for you, contact us for a free strategy session to talk with our experienced Chapter 11 attorney. 

      What is the difference between Chapter 11 and Chapter 13?

      Chapter 11 and Chapter 13 sound very similar on the surface but their eligibility requirements are what makes them different from one another. 

      Chapter 11 is open to almost any individual person or business without a specific income or debt limitations. 

      Chapter 13 often requires you to have a specific income or debt limits that don’t exceed $419,275. Additionally, Chapter 13 may require you to have a stable income. When a debtor exceeds the $419,275 limit on their unsecured debts, they may file for a Chapter 11 bankruptcy instead.

      Do I have to go through credit counseling for Chapter 11?

      If you are filing a Chapter 11 bankruptcy as an individual rather than a business then you will be required to take a credit counseling course prior to filing the petition. Additionally, the course must be approved before you file your Chapter 11 petition. 

      If you are a business that is filing Chapter 11 bankruptcy, you are not required to take a credit counseling course before completing the petition.

      How Chapter 11 Bankruptcy Can Protect Your Business

      In short, Chapter 11 bankruptcy essentially protects businesses from lawsuits and creditors while they work to manage and absolve financial obligations. Operations are allowed to continue under the supervision of the Bankruptcy Court, which allows businesses to survive what otherwise might have been a dire situation. By paying down debts, the business can return to its regular operation without oversight from the courts. 

      Under reorganization, the business can:


          • Restructure terms of unsecured debt owed to creditors

          • Renegotiate or cancel leases and other contracts that are no longer beneficial to the company

          • “Cramdown” loan payments for things such as company equipment

          • Reorganize state and federal tax obligations

        Chapter 11 bankruptcies can not only protect a business from going out of business but also help businesses thrive in times of uncertainty or challenges. If your business is facing financial trouble, contact us today for a free strategy session to find out if a Chapter 11 is right for your business.

        Adverse Situations in Chapter 11 Bankruptcy

        In addition to understanding Chapter 11 Bankruptcy, it is also important to know how the Bankruptcy Court can deny Chapter 11 discharges. For example, the Court can immediately deny discharge if they find that debtors are concealing property, falsifying or destroying records, or committing fraud. In this situation, the debtor could be facing criminal charges.

        Furthermore, the Court can deny approval if it finds the reorganization plan unfeasible, not proposed in good faith, or by not paying the correct amounts established by law. Creditors also have the chance to vote to not approve the plan.

        If you are considering Chapter 11 as a solution to your financial burdens, you may need an attorney to help. John Dunlap is an experienced bankruptcy attorney that has helped clients through. Chapter 11 cases. Call today for a free 30 minute session to see how we may be able to help you.