If your business is struggling to stay afloat and its debts have become overwhelming, there are relief options available to you in Philadelphia. Chapter 11 bankruptcy is designed for businesses that simply cannot repay their debts. This is often the case when a business restructures itself to deal with changing economic times, but it also applies in cases where businesses have been mismanaged and cannot afford to pay creditors. In these cases, Chapter 11 bankruptcy provides a specific process for the court-supervised reorganization of a business’s finances.
If your business is in debt distress and you need assistance finding solutions, contact an experienced PA bankruptcy law attorney who can provide information about Chapter 11 bankruptcy and other debt-relief options. You can search online for “attorney near me” for a good starting point for lawyers to call.
When a business files for Chapter 11 bankruptcy, it must present its proposed reorganization plan to the court. This is essentially its strategy for restructuring itself financially to meet its obligations and continue operating. The plan outlines how much money it needs to receive from creditors to become solvent again, and who will be responsible for making payments during the restructuring process.
If the parties involved in the Chapter 11 bankruptcy agree with the plan and sign off on it, then the court will likely approve it, as well. This is what is meant by a “confirmed” Chapter 11 bankruptcy: The creditors and other interested parties have agreed to restructure some or all of their debts, and now they can receive payments according to the plan’s terms.
The court then also issues a “discharge,” which means that it has fully discharged the debtor from its debts and set in motion a schedule for repayment. The debtor no longer owes any of its creditors and is authorized under Chapter 11 bankruptcy law to continue operating as usual. If any of the creditors are dissatisfied with the plan, however, they may reject it. If this occurs, then Chapter 11 bankruptcy will end and the debtor will be responsible for making payments to creditors in accordance with its reorganization strategy.
These are some of the important ways a PA bankruptcy law firm can help you in a Chapter 11 action:
They would also be able to help you identify and preserve exemptions that will protect your assets. For example, there is a $1,000 exemption for tools of the trade so if you are an auto mechanic or baker, these items cannot be taken by creditors. In addition, Philadelphia has broad homestead exemptions so many homeowners can protect their homes, even if their homes are worth several hundred thousand dollars.
If the need arises, they can help you prepare for and attend creditors meetings so that you can ask to have debts discharged. An experienced attorney has seen many types of debt claims so they know how to spot problems with the creditor’s proof of claim or validity of an objection.