Georgia Chapter 11 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

Are you feeling overwhelmed because your business is struggling financially? Debt in business can make life very stressful for a lot of people. Our Georgia Chapter 11 bankruptcy lawyers want to help you make the transition from this life full of stress to a brighter future with fewer worries. Call us today to get started.

Georgia Chapter 11 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

Are you feeling overwhelmed because your business is struggling financially? Debt in business can make life very stressful for a lot of people. Our Georgia Chapter 11 bankruptcy lawyers want to help you make the transition from this life full of stress to a brighter future with fewer worries. Call us today to get started.

Georgia Chapter 11 Bankruptcy Lawyers

Georgia Chapter 11 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

Are you feeling overwhelmed because your business is struggling financially? Debt in business can make life very stressful for a lot of people. Our Georgia Chapter 11 bankruptcy lawyers want to help you make the transition from this life full of stress to a brighter future with fewer worries. Call us today to get started.

Testimonials

“You helped me restore my faith in so much that looked bleak and decrepit. Along this bumpy road, my lovely daughter is safe, and home, and starting to find peace again…Thank you. All the pieces unfolded and fell into place through a progression only the Lord could have planned. But the people who fulfilled his plan did it through greatness and kindness and strength. In my opinion you and Martha have done Gods work and the Judge came through! I am indebted to you both. Please understand, I can be a force and support as well. “What doesn’t kill you makes you stronger”. I still have a long way to go…so I hope that statement is true. My commitment to be there for you is equally strong. It will be a tough journey. I Pray. You guys are amazing. Thank you for everything.”

BONNIE GRINGER

“We were referred to Mike Hall by a friend who told us that if they had used him in the beginning, they would have had a lot better result. Using Mike ourselves, we have had the same experience. Mike is very personable and gave us some very wise council. We could tell he was trying to help us. We have used him for several issues that have come up, and he has always handled them in a professional and timely manner. He is quick to answer emails or phone calls, and takes his time answering all of your questions. We are very pleased with his services and would highly recommend him to anyone who has a legal problem.”

LYNN & PAM KELLEY

“After a two and a half year battle, my son and I got the justice we longed for. The only quality that I didn’t like about Paige was that she was patient. Which, is a very good quality to have. However, hindsight being 20/20, I’m glad she was so patient. Paige and Ashley (her paralegal) were always in communication with me, and responded in a timely and appropriate manner. When opposing counsel started her antics and attempted to berate and take Paige’s eye off the prize, she didn’t allow it. I sincerely appreciate all they did for me and my son. I know my circumstances were extreme, but Paige looked out for the two of us. I highly recommend the law group, and will always be indebted to them.”

DUSTIN SHAW

“This review is in regards to how attorney Martha Hall handled my cases. Before Martha Hall, I was taken advantage of in family court in Jefferson County and Effingham County with sub par attorneys that resulted in rulings that were unfair to me and created headaches and financial difficulties. I experienced three attorneys before Martha Hall. I never felt that I had equal representation in the courthouse, until I discovered Martha Hall. Since I have hired Martha Hall, I have had equal or better representation and my cases have closed with fair rulings. This is solely a result of having Martha Hall as my attorney. I will not change thus moving forward if I need any legal services. She is worth every penny.”

KEN GIBSON

“I just have to say the professionalism and conduct of the Hall and Hall attorneys was fantastic from the time we walked in the door. We met Sarah then Mrs. Martha Hall. They were all very attentive and compassionate. Kara, our paralegal, was always there for us. She was always there via email or phone contact. We had a very sensitive legal case and Mrs. Martha Hall walked us through it with compassion and professionalism. I cannot say enough good things about this group or thank them enough for doing what needed to be done.”

MYA AND DEAN CAPE

7 Mistakes to Avoid Making When Filing Bankruptcy

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What the Debtor Who Can File Chapter 11 Bankruptcy Should Know

There are three types of Chapter 11 bankruptcies presently. There is the normal Chapter 11; there is the small business case; and as of February 19, 2020, a subchapter V case. Each Chapter 11 case has different requirements and procedures. All are for the rehabilitation of a business that is having cash flow problems.

A subchapter V Chapter 11 is a voluntary election by the debtor. This case resembles a chapter 12 or 13 case is some ways. It provides for a trustee to generally oversee the business but leaves the debtor in possession of the assets and control of the business.  In some cases, the trustee may make distributions to creditors. The debt limitation presently is $7,500,000 under the CARES Act. Normally the debt limitation is $2,725,625.  This bankruptcy attempts to expedite bankruptcy and reduce administrative expenses. Debtors must file plans of reorganization within 90 days of the bankruptcy filing. There is no disclosure statement to prepare and pay for. No administrative fees are paid to the United States Trustee. Most importantly for small businesses there is no requirement the principals of the debtor have to fund the purchase of shares in the business. In other words, the subchapter V eliminates the “absolute priority” rule (owners can retain their equity in a Subchapter V small business over the objection of a class of unsecured creditors, without paying those creditors in full). A more complete discussion of subchapter V cases is covered below.

The same debt limitation is applicable in a “small business case”. If the debtor business has debt less than $2,725,625 it is deemed a small business case if no election is made to be a subchapter V case. A small business case (‘SBC”) has additional filing requirements such as financial statements within seven days of filing. Only the debtor may file a plan in a SBC within 180 days of the bankruptcy but must file a plan within 300 days or the case will be dismissed or converted to chapter 7. The disclosure statement may be conditionally approved without a separate hearing as is required in a normal chapter 11.

As would be expected most chapter 11’s will fall into the two above categories. If the case is a single real estate asset case, neither SBC nor subchapter V is available. The remaining option is a normal chapter 11 case.  In this chapter 11 the debtor has 120 days in which you, as the debtor, can file your Chapter 11 bankruptcy. It is an exclusive right in which you can file your plan to repay or reorganize your debt to the creditors. The court can grant an extension or even reduce this time, if it deems fit to do so. The amount of time it can extend it, however, is capped at 18 months. As soon as this time limit has ended, which could be somewhere between 120 days or 18 months, the creditors may file a competing plan if they choose to do so..

All bankruptcies require:

  • To confirm any plan of reorganization, the debtor must satisfy the so-called Best Interest Test by providing creditors at least as much as they would receive if the debtor were liquidated and not reorganized.
  • Secured creditors retain the right to make an election under section 1111(b)(2) of the Bankruptcy Code to have the entire amount of their claims remain secured by their collateral, while receiving altered payment terms under the Plan. The effect of a section 1111(b)(2) election is to secure for the secured creditor any post-confirmation increase in the value of its collateral effectively upon its sale, at the expense of receiving payment on the unsecured deficiency part of its claim under the debtor’s confirmed plan of reorganization.
  • Secured creditors retain their rights to have their collateral “adequately protected” against diminution in value or be granted relief from the Bankruptcy Code’s automatic stay to realize on their collateral.
  • To assume executory contracts, i.e., leases debtors must still cure defaults and, where required, provide adequate assurance of future performance.

Do note that Chapter 11 could continue to go on for several years. The ones who have the power to make sure that the case is resolved in a timely manner are the court, the trustee of the case, and the committee working on the case. If you have any questions at all about what you should be preparing for, please call our Georgia Chapter 11 bankruptcy lawyers right away.

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Defining Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a way to reorganize your debts and assets. You will be looking to gain a fresh start with Chapter 11. It can be very complex and you should absolutely precede with the help of one of our Georgia chapter 11 bankruptcy lawyers.

Likely the filing of Chapter 11 is going to allow for a business to continue operating. Historically, there have been several large businesses that have continued to operate during a Chapter 11 bankruptcy such as K-mart, United Airlines, General Motors and so on. Chapter 11 is not just for huge businesses. It can help any size business. It is very rare to see an individual person file for Chapter 11 bankruptcy but it is not unheard of when someone has a lot of debt but doesn’t qualify for Chapter 7 or 13.

Bankruptcy National Living Allowance: Effective 4/1/2020

Household SizeFood and Housekeeping #7 on Sch. JClothing #9 on Sch. JPersonal Care #10 on Sch. JMisc.Total Allowed
1 Person$426.00$88.00$43.00$170.00$727.00
2 People$757.00$159.00$70.00$302.00$1,288.00
3 People$862.00$169.00$76.00$339.00$1,446.00
4 People$1034.00$243.00$91.00$418.00$1,786.00
5 People$1,275.00$301.00$112.00$518.00$2,206.00
6 People$1,518.00$358.00$133.00$617.00$2,626.00
7 People$1,761.00$415.00$155.00$715.00$3,046.00
8 People$2004.00$472.00$176.00$814.00$3,466.00
Add'l Persons$282.00$0.00$0.00$138.00$420.00

Bankruptcy Means Test Guide

Household SizeAnnual Income
1 Person$50,128.00
2 People$65,007.00
3 People$73,738.00
4 People$87,317.00
5 People$96,317.00
6 People$105,317.00
7 People$114,317.00
8 People$123,317.00
Add'l Persons$9,000.00

Things to Consider

When bankruptcy is being considered, note that this must benefit the creditors who have loaned money.

Whether you are filing Chapter 11 bankruptcy for your business or as an individual, you as the debtor are going to be able to propose a plan to reorganize your debt first. You may show that you will downsize some of your business, which would reduce costs and so on. It also may include liquidating some of your assets in order to pay back some of the debt to your creditors. The court may accept the plan as you made it, if they see it playing out well. If not, it will be made for you.

Frequently Asked Chapter 11 Bankruptcy Questions

Can the debtor issue payroll checks on its regular paydays in a chapter 11 bankruptcy Can the debtor issue payroll checks on its regular paydays in a chapter 11 bankruptcy?

One of the first questions that we get regarding a Chapter 11 bankruptcy in Georgia is how to continue to pay your employees. Any Chapter 11 requires the setting up of three different accounts. One is a tax account, one is a payroll account, and one is an operating account. Those accounts must be set up in order to pay the employees after the filing of a bankruptcy. You need to have those accounts set up in order to disburse those monies to your employees, but the quick answer is you can pay your employees, of course, after the filing of a bankruptcy as, obviously, you have to have your employees to continue to do business. If you any questions, please give me a call.

Do I have to be operating a business to file chapter 11 bankruptcy?

Clients often ask whether or not they have to be operating a business in order to file a Chapter 11. The quick answer is yes. The business needs to be operating in some sort of fashion in order to have a viable case. The issue in a Chapter 7 is whether or not you can propose to the court a feasible plan of reorganization. Ninety-nine percent of the time, you would have to have a business that is operating to have a viable Chapter 11 bankruptcy. I suppose there could be some odd circumstances such that a business has a temporary shutdown and is reopening. That could be a potential viable candidate for a Chapter 11 bankruptcy, but every situation is different. That is why it’s so important to choose your Chapter 11 bankruptcy attorney with a great degree of discretion and insight so that that attorney knows how to properly advise you as to what are your best alternatives. If you have any questions, please give us a call.

How are disputed claims resolved in a chapter 11 bankruptcy?

In Georgia in a Chapter 11 bankruptcy, as well as many other states, a disputed claim sometimes arises. When a claim arises which is disputed by the creditor or by the debtor, there is a process by which you file an objection to the proof of claim, or you file a lawsuit in bankruptcy to object or to value the claim. If you have any questions, please give our office a call.

How do I choose the right attorney for a chapter 11 bankruptcy?

One of the questions people occasionally ask us is how to choose the right attorney for a Chapter 11 bankruptcy. Choosing the right attorney for a Chapter 11 bankruptcy is very, very critical. Many bankruptcies are form driven. A Chapter 11 bankruptcy is not form driven. It’s the difference between having a mechanic and an artist. You really have to have an attorney who has worked in Chapter 11 bankruptcies, and who knows the ins and outs of Chapter 11 bankruptcies, because each Chapter 11 bankruptcy is different. You have different creditors, different plans, and different ways in which to pay back your creditors or pay back the value of the assets in the bankruptcy. What assets are being held and treated in the bankruptcy? Which assets are not being held in the bankruptcy?

Choosing the right attorney for a Chapter 11 bankruptcy is very, very critical, and so you want to find an attorney who’s very experienced in Chapter 11 work. That’s totally different than a Chapter 7 or a Chapter 13. You would ask your accountant. Check on referrals. Check on the actual number of cases that attorney has actually filed. If you have any questions concerning a Chapter 11, please give our office a call.

What happens when a business files a chapter 11 bankruptcy What happens when a business files a chapter 11 bankruptcy?

When we file a Chapter 11 bankruptcy in Georgia, a client will always ask us what happens next. That’s a pretty complicated picture. In a Chapter 11 bankruptcy, you have a lot of moving parts. You have a business that you’re running. You have payroll that has to be made. You have accounts receivables that have to be collected, so you continue to run your business as you did before. You have separate accounts now set up for the debtor in possession: a tax account, an operating account, and a payroll account, but you also have issues concerning the collection, for instance, of accounts receivable. Many times, accounts receivables might be placed to your creditor. Obviously, to collect those receivables and to use those in your business would be very important, so you have to obtain the creditors permission to use those monies in your business, or you have to obtain court approval.

A Chapter 11 bankruptcy is a complicated bankruptcy in which you really need an attorney who has done this kind of work before, who knows what kind of motions to file, what kind of approvals to obtain, knows the trustee. You have a Chapter 11 trustee. You have the court, the bankruptcy judge in the court, and you have the creditors. All these parties have to work together for a successful Chapter 11 bankruptcy to occur, and if you have any questions, please give our office a call.

What is 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. If you have any questions, we do a lot of Chapter 11s, and so we would be happy to help you with that question.

What is the goal of a chapter 11 bankruptcy What is the goal of a 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, but if you have any questions, please give us a call.

What should I do to prepare for a 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. If you have questions, please give our office a call.

Who may file under chapter 11 bankruptcy?

Many people ask us who can file for a Chapter 11 bankruptcy in Georgia. There are now three different kinds of Chapter 11 bankruptcies. There’s the regular Chapter 11 bankruptcy. There’s also the small business Chapter 11 bankruptcy, which is called a Class 5 Chapter 11 bankruptcy. Each one of those classes have different criteria, but anyone who has a business that is an ongoing business could file a Chapter 11 bankruptcy, whether it was a corporation or whether it was a sole proprietorship or a limited liability company. If you have any questions, please give our office a call.

Why do individuals or companies choose to file chapter 11 bankruptcies Why do individuals or companies choose to file chapter 11 bankruptcies?

Many times, people ask us why a company would file a Chapter 11 bankruptcy in Georgia. There are basically two reasons to file a Chapter 11 bankruptcy. One is to obtain an orderly liquidation of assets, for instance, if the company is not profitable. It cannot be profitable, but yet, there needs to be an orderly liquidation of its assets. Then a Chapter 11 might work. The other reason and primary reason that we file Chapter 11s is that the business is truly profitable but just has a cash flow crunch such as might be the case for some businesses during COVID-19, if you haven’t been able to work your business like you normally do. Your sales have fallen down. You still have employee salaries that need to be paid, but yet, in the long term, the business can be profitable.

A Chapter 11 would give you a breathing spell. For instance, in a Chapter 11, you can have up to four and six months to actually file a plan to start repayment to your creditors, and that gives you a breathing spell in which the court allows you a breathing spell or a time to reorganize your debts, reorganize your assets, reorganize your business so that it can be a profitable future and have a lifespan that it would not have otherwise because the creditors might foreclose and take your assets away. If you have any questions concerning filing of Chapter 11, we’ve done many Chapter 11s. We’d be happy to help you.

Call Our Georgia Chapter 11 Bankruptcy Lawyers Today

If you are struggling and worried about your future, please know we are here to guide you through your Chapter 11 bankruptcy. This is a challenging time and we aim to take some stress away from you. Please do not hesitate to reach out to our Georgia Chapter 11 bankruptcy lawyers.

Key Features of Subchapter V

Court may confirm a plan even if all classes reject it. A plan may modify a claim secured only by a security interest in the debtor’s principal residence if the new value received in connection with the granting of the security interest was not used primarily to acquire the property and was used primarily in connection with the small business of the debtor. Such modification is not permitted in standard or non-sub V chapter 11 cases or in chapterl2 or 13 cases. (Section VII(B)).

  • Disposable Income. As in a chapter 12 or 13, in a Subchapter V case, as long as unsecured creditors are to be paid the debtor’s “disposable income” for a period of three years (or up to five years if extended by the court), equity holders will continue to own and manage their business, even where creditors all vote against the plan and object to confirmation. Disposable income includes income that is reasonably necessary to be expended “for the payment of expenditures necessary for the continuation, preservation, or operation of the business of the debtor” which would include salaries to the owners.
  • No Disclosure Statement Requirement. A chapter 11 disclosure statement is normally not required in Subchapter V. Elimination of the disclosure statement reduces costs significantly and expedites the plan confirmation process. The chapter 11 plan itself, however Continued Ownership and Management. Non-consensual plan confirmation in Subchapter V differs radically from the “cramdown” rules of traditional chapter 11 cases. Under the absolute priority rule in non-Subchapter V cases, existing owners cannot retain equity in the debtor over the objection of a class of unsecured creditors, unless the class is paid in full or the owners contribute new capital into the company.
  • The, must contain a brief history of the debtor’s business operations, a liquidation analysis, and projections with respect to the debtor’s ability to make plan payments.
  • No Competing Chapter 11 Plans. Only a debtor may file a chapter 11 plan in a case under Subchapter V.
  • Delayed Payment of Administrative Expense Claims. In contrast to a traditional chapter 11 case, where administrative expense claims have to be paid on a plan’s effective date or in the ordinary course of business, a small business debtor in Subchapter V may stretch out payment of administrative expense claims over the term of the chapter 11 plan.
  • 90 Days to File A Plan. Subchapter V debtors are required to file a plan not later than 90 days after entering bankruptcy, unless the need for the extension is caused by circumstances “for which the debtor should not justly be held accountable.”
  • Appointment of a Specialized Trustee. Management of the debtor’s affairs remains with the debtor, although one or more Subchapter V trustees are appointed for all Subchapter V cases in each U.S. Trustee region to monitor the debtor’s affairs, evaluate the debtor’s assets, assess the debtor’s prospects for success, and make recommendations regarding confirmation of the debtor’s plan. See 11 U.S.C. § 1183(b). In a non-consensual plan confirmation, the trustee collects and distributes plan payments.
  • Required status conference and report from debtor. The court must hold a status conference within 60 days of the filing “to further the expeditious and economical resolution” ofthe case. Not later than 14 days before the status conference, the debtor must file a report that details the efforts the debtor has undertaken and will undertake to achieve a consensual plan of reorganization.
  • Discharge. If the court confirms a consensual plan, a sub V debtor (including an individual debtor) receives a discharge under § 1141( d)( 1 )( A) upon confirmation. The provision in § 1141( d)( 5)for delay of discharge in individual cases until completion of payments does not apply in a sub V case. In the case of an individual, the § 1141(d)(1)(A) discharge does not discharge debts excepted under § 523(a). § 1141(d)(2). One effect of the grant of the discharge is that the automatic stay terminates under§ 362(c)(2)(C). If the court confirms a cramdown plan,§ 1141(d) does not apply, and confirmation does not result in a discharge. Instead, new § 1192 provides for a discharge, which does not occur until the debtor completes plan payments for a period of at least three years or such longer time not to exceed five years as the court fixes. Under new § 1192, the discharge in a cramdown case discharges the debtor from all debts specified in § 1141(d)(l)(A) and all other debts allowed under§ 503 (administrative expenses), with the exception of: (1) debts on which the last payment is due after the first three years of the plan or such other time not exceeding five years as the court shall fix; and (2) debts excepted under§ 523(a). Under § 362( c )(2), the automatic stay remains in effect after confirmation of a cramdown plan until the case is closed or dismissed, or the debtor receives a discharge.
  • Property of the Estate. Section 1115 provides that, in an individual chapter 11 case, property of the estate includes assets that the debtor acquires postpetition and earnings from postpetition services. Section 1115 does not apply in a subchapter V case. New § 118l(a). If the court confirms a plan under the cram down provisions of new § 1191(b ), however, property of the estate includes (in cases of both individuals and entities) postpetition assets and earnings. New § 1186(a).