Is your small business struggling to keep up with payments on its vendor debt, bank loans, leases, or taxes?
A Chapter 11 bankruptcy case may be appropriate for an individual or small business in Atlanta, Georgia. The goal of most Chapter 11 cases is to reorganize financial affairs by proposing a plan to the Court by which repays or eliminates some debts, and sells or surrenders unnecessary assets.
Chapter 11 allows individuals with larger debts to restructure their business and personal affairs. Generally, Chapter 13 is the preferred restructuring chapter of the Bankruptcy Code for individuals due to its streamlined nature and relative low cost. However, an individual may not file a Chapter 13 case if her unsecured debts exceed $383,175.00, or if her secured debts exceed $1,149,525.00. While these debt limits do not disqualify most consumer debtors from filing Chapter 13, they are often a substantial hindrance to small business owners who have personally guaranteed large amounts of business debt, or individuals who own multiple mortgaged properties.
For a Georgia corporation or LLC, Chapter 11 is the only available way to reorganize under the Bankruptcy Code. The only other type of business bankruptcy, Chapter 7, results in a total liquidation of the business and its assets and the end of business operations.
Chapter 11 can be a powerful tool for either an individual or business. Filing a Chapter 11 case will immediately stop any pending collection efforts, litigation, repossessions, or foreclosures. Filing and obtaining Court approval of a Chapter 11 plan can, among other things, allow a debtor to repay debts over time. Often, repayments under a Chapter 11 plan total only a fraction of the total amounts owed prior to filing the Chapter 11 case. A Chapter 11 case also allows a debtor who has fallen behind on payments to cure any default on a debt secured by collateral, including real estate or vital business equipment, and retain those assets.
If you have questions or need assistance, call us today to speak with one of our lawyers by phone or in person.