Are you or a loved one in the process of filing for bankruptcy? Check out these chapter 11 bankruptcy tips, then call our Georgia lawyers now.
1. Chapter 11 Bankruptcy
One of the questions that many clients ask us is what types of bankruptcies are available for people in Georgia. You have Chapter 7 bankruptcy and Chapter 13, which typically are for people who are wage earners and have a regular job. There’s a different type of bankruptcy called a Chapter 11 for businesses. Now, you don’t have to be a corporation. You can be an individual if you file a Chapter 11, but that’s a much more complicated type of bankruptcy. It’s designed for businesses, from businesses as small as one person to a large company like Delta Airlines.
A Chapter 11 is a much more complicated bankruptcy that involves listing your schedules. You list your assets, your debts, but you also have monthly operating reports which show the income from the business and the profitability of the business, and how much money is the business generating to pay its debts? Typically, a plan must be filed in a Chapter 11 case, for instance, within four to six months of the filing of the bankruptcy, whereas in a Chapter 13, of course, the plan is filed when you file a bankruptcy. It’s a much more complicated bankruptcy that is only used for people who have businesses that require a more complicated type bankruptcy.
2. Goal of Chapter 11 Bankruptcy
In Georgia, as well as any other state, there are numerous types of bankruptcy. The primary purpose of a Chapter 11 bankruptcy is to reorganize a business. In a Chapter 7, for instance, you’re basically in a liquidation, and it’s normally an individual or a husband and wife who are trying to eliminate debt. A Chapter 13 is a bankruptcy where an individual or couple are attempting to reorganize the debt over a period of three to five years. A Chapter 11 does not have any restraints, such as a 7 or a 13. The payment terms can continue for 20 years, in fact, but the purpose of a Chapter 11 bankruptcy is to either reorganize the business or determine that the business cannot be reorganized and have an orderly liquidation of its assets.
3. Preparing for Chapter 11 Bankruptcy
People ask us occasionally what they should do to file a Chapter 11 bankruptcy in Georgia. The first thing that you must do filing a Chapter 11 is work with your accountant to be sure that your books and your records are up to date, that your tax returns have been filed, and then you can bring that information into your attorney to begin the process of putting that information into bankruptcy schedules. Again, a Chapter 11 bankruptcy is a more complicated bankruptcy than a Chapter 7 or 13, and it requires quite a bit of ingenuity in putting the numbers into the bankruptcy and figuring out what assets are needed to run the business in the future. Which assets can be given up? What lines of business need to be continued? Which lines of business need to be discontinued? You need to get a good financial picture of where you are prior to filing bankruptcy, and we can help you in working with your accountant to put that information together so that you can prepare your schedules and make a real determination whether a Chapter 11 is to your benefit in the long run.
Are you or a loved one in the process of filing for bankruptcy in Statesboro, Springfield, or Swainsboro and have questions about these Chapter 11 Bankruptcy tips? Contact the experienced Georgia bankruptcy attorneys at Hall & Navarro today for a consultation and case evaluation. We can help get your life back on track.