423-874-6628Chattanooga Chapter 11 Bankruptcy Attorneys
Helping Clients Understand the Bankruptcy Process and How They Can Make It Through to the Other Side
Chapter 11 bankruptcy is a legal process that allows businesses, LLCs, corporations, and partnerships to reorganize their finances and debts. It’s one of the most commonly used forms of bankruptcy. As opposed to Chapter 7, which typically marks the end of a business entity, Chapter 11 allows the business to continue running while reorganizing it in a way that is hopefully more profitable.
If you are a business owner considering this form of bankruptcy, the Chattanooga Chapter 11 bankruptcy lawyers at Tom Bible Law are here to offer experienced legal guidance. We have over 18 years of experience handling bankruptcy cases for individuals and businesses, and we’ve filed tens of thousands of cases. With offices in Chattanooga and Tullahoma, we help clients all throughout Tennessee and North Georgia.
To arrange a free consultation with an experienced bankruptcy attorney, contact our office or call us at 423-874-6628. Our Chapter 11 bankruptcy attorneys can quickly evaluate your case and help you understand if a Chapter 11 bankruptcy is an option and how it could benefit your business.
Is Chapter 11 Bankruptcy Right for Your Business?
To know whether Chapter 11 is the best option for your company, you need to understand how it works. Chapter 11 bankruptcy is also sometimes referred to as a reorganizational bankruptcy because most businesses that choose this option will also choose to restructure the business in a way that lets them satisfy their creditors and continue operations.
While it’s commonly used by business entities, the bankruptcy code does not limit Chapter 11 filings to companies. It’s also available to individuals as well as sole proprietorships, partnerships, and limited liability companies. You also don’t have to have a specific amount of debt or annual income or profit to be eligible to file. Many larger corporations and small businesses choose this option because it also allows the company to keep most of its assets.
However, there are also some drawbacks that business owners need to consider. A Chapter 11 bankruptcy is one of the more expensive options, which can be difficult for businesses that are already operating in the red. It’s also a long process, with many repayment plans taking several years to finish. While you can generally maintain basic business operations, including buying inventory or making sales, there are also some decisions and actions you will need court approval for, which can create delays for your company.
If you’re not sure if filing for a Chapter 11 bankruptcy is the right path forward for your company or you want to understand what your other options or bankruptcy alternatives may be, the attorneys at Tom Bible Law can help.
What Is the Process for Filing Chapter 11 Bankruptcy?
To begin the process, the business must file a petition through the local court, which includes information about their debts, business assets, and finances. Once the debtor files the petition and it is processed, the court will issue an automatic stay, prohibiting any creditors from taking debt collection actions. This can give the company some space and time to breathe without the imminent threat of repossession of equipment or other issues that could impact business operations.
After the stay is issued, you have a specified length of time (normally four months) to work with the court and creditors to come up with a reorganization plan outlining how you resolve your financial obligations. One of the benefits of a Chapter 11 bankruptcy filing is that this plan can be tailored to the specific business. For example, the business owner can decide whether to sell off some of the business’s assets to pay creditors.
If the business owner doesn’t propose a plan by the deadline, the creditors committee can create and propose their own plan. Any plan created must be in the interests of the creditors. It must also be feasible for the debtor to make the monthly repayment plans.
Once the plan has been confirmed by the courts, the next step is the repayment phase. This can last for several years. After the payments have been satisfied by the debtor, the bankruptcy is discharged, which means any remaining debts are forgiven.
What Does Debtor in Possession Mean?
The goal is for the repayment plan to be fair for you and for your creditors. It will create a schedule for repayment, and during this time, your company will continue operations as a “debtor in possession.”
Being a debtor in possession makes you the trustee of your bankruptcy estate, giving you certain rights and obligations, as well as protection against creditors. This allows you to focus on restructuring your finances in the interest of sufficiently resolving your debts. The court will make the final decision regarding whether this is a good and viable option for your company and your creditors.
The debtor in possession can make unilateral business decisions as long as those decisions are in the normal course of operations. If a decision is not part of your normal course of business, you must obtain permission from the bankruptcy court before executing it.
How Can You Protect Your Business by Filing for Chapter 11 Bankruptcy?
If your business is facing financial difficulties and struggling to meet its obligations, Chapter 11 bankruptcy may provide a solution to help you regain control and protect your assets. At Tom Bible Law, our experienced Chattanooga Chapter 11 bankruptcy attorneys can guide you through the complex process and help you make informed decisions.
Benefits of filing for Chapter 11 bankruptcy include:
- Protection from creditor actions: Initiating a Chapter 11 bankruptcy application brings an automatic stay or halt, preventing creditors from undertaking collection activities against your enterprise
- Reorganization of debts: Chapter 11 facilitates the development of a debt restructuring plan, making payments more bearable and possibly decreasing the overall debt amount
- Continued business operations: Unlike other bankruptcy chapters, Chapter 11 allows your business to continue operating while the reorganization plan is being developed and implemented
- Asset protection: Chapter 11 provides opportunities to protect your business assets from being liquidated and sold off
- Ability to renegotiate contracts: Chapter 11 allows you to renegotiate contracts and leases, potentially reducing financial burdens and improving your business’s long-term prospects
Don’t let financial challenges jeopardize the future of your business. Contact our dedicated Chattanooga Chapter 11 bankruptcy lawyers today to discuss your options and find the best path forward.
How Can a Chattanooga Chapter 11 Bankruptcy Lawyer Help You?
Thorough planning is a key element to a successful Chapter 11 bankruptcy process. The attorneys at Tom Bible Law can help you position yourself in such a way that maximizes your advantages in filing for Chapter 11 bankruptcy.
Our firm can provide guidance throughout the entire process and make sure that you understand how Chapter 11 works and the potential implications of it for your business. We can also help you prepare and file any documents, such as petitions, schedules of assets and liabilities, and disclosure statements.
In addition, our lawyers can also help you negotiate a repayment plan with creditors. This negotiation is one of the most pivotal steps of the entire legal process, and it’s directly related to the future success of your business. We can help protect your interests in these negotiations and craft an agreement that is fair to you and amicable for your creditors.
It’s our goal to give you the best chance to successfully reorganize your finances. Give our Chattanooga Chapter 11 bankruptcy attorneys a call at 423-874-6628 or complete our online form to discuss your case.
Commonly Asked Questions
How Long Does a Chapter 11 Bankruptcy Take?
While it’s normal to want fast relief when you’re dealing with mounting business debts, filing for bankruptcy isn’t usually a quick process. Filing the initial bankruptcy petition is only the first step, and it can take several months and sometimes even years for a Chapter 11 bankruptcy to be finalized. The amount of time it will take depends on your business’s financial situation, how many creditors you owe, and what your goals are for the company. However, there are some steps you can take to expedite the process — the most important of which is working with an experienced bankruptcy law firm.
At Tom Bible Law, we understand how important it is to get through the bankruptcy process as quickly as possible so your business can move forward. As soon as you’re ready to file a petition, our attorneys get to work to ensure a speedy start to your case. In situations where the plan is to sell the business as part of the bankruptcy, the process may move more swiftly. In contrast, formulating a structured plan and getting it approved can take more time. Our attorneys are able to help you better understand how long the Chapter 11 process can take and make decisions that support your desired timeline.
What Types of Debt Does a Chapter 11 Bankruptcy Take Care Of?
It’s important to understand that bankruptcy does not necessarily discharge any and all debts. The debts that can be processed under the Chapter 11 bankruptcy rules include unsecured debt related to the business, such as credit card bills and personal loans. Secured debts related to the debtor’s business can also be covered under a Chapter 11 bankruptcy. However, there are some exclusions for this filing as well. For example, some tax claims, personal debts for spousal support or child support, and debts related to fraud cannot be discharged in bankruptcy. Business debtors should meet with an attorney to ensure they understand what can and cannot be covered in a Chapter 11 bankruptcy filing.