Los Angeles Chapter 11 Bankruptcy Attorney

Expert Chapter 11 Bankruptcy Guidance in Los Angeles, CA

Filing for Chapter 11 bankruptcy can be a complex and challenging decision for individuals and businesses struggling with overwhelming debt. At RHM LAW LLP, our experienced Los Angeles Chapter 11 bankruptcy lawyers are committed to helping you navigate the legal process and secure a fresh start. Whether you are an entrepreneur, a corporation, or an individual, our team will work with you to understand your unique situation and provide tailored legal counsel that aligns with your financial goals.

If you are considering filing for Chapter 11 bankruptcy in Los Angeles, it is essential to understand the intricacies of the process and how it can benefit you. We are here to guide you through every step, from assessing eligibility to successfully emerging from bankruptcy with a restructured financial position.

Call (213) 344-0043 or contact us online today to schedule a 30-minute risk-free consultation.

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is a form of reorganization bankruptcy that allows businesses and individuals to reorganize their debts and continue operations while paying off creditors over time. Unlike Chapter 7 bankruptcy, which involves the liquidation of assets, Chapter 11 provides an opportunity for debtors to create a repayment plan that allows them to restructure their finances and keep their business or assets intact. This process is commonly used by corporations, partnerships, and sole proprietors facing significant debt but wishing to avoid closure or asset liquidation.

Chapter 11 bankruptcy allows debtors to regain control of their operations while negotiating with creditors, often reducing or extending their debts and repayment terms. It also grants the debtor the ability to reject or modify certain contracts, providing greater flexibility to navigate financial challenges. Throughout the process, a debtor will be guided by a court-appointed trustee who ensures that the plan is feasible and in the best interests of all parties involved.

Qualifications for Chapter 11 Bankruptcy

To qualify for Chapter 11 bankruptcy, individuals or businesses must meet certain requirements. While Chapter 11 is often viewed as an option for businesses, it is also available to individuals whose debts exceed the limits set for Chapter 13 bankruptcy.

Business Debtors

For businesses, Chapter 11 is available to a variety of entities, including corporations, partnerships, and limited liability companies (LLCs). These entities can file for Chapter 11 even if they have substantial debts, and they have the flexibility to propose a plan to reorganize and restructure their financial obligations. A business filing for Chapter 11 typically continues operating its day-to-day activities while the restructuring process takes place.

Individual Debtors

For individual debtors, Chapter 11 is also an option, though it may not be the most common choice for individuals with relatively smaller amounts of debt. It is typically chosen when an individual has debts that exceed the thresholds for Chapter 13 bankruptcy (currently $419,275 in unsecured debt and $1,257,850 in secured debt). Individuals who want to retain their assets and work out a long-term repayment plan may find Chapter 11 an effective solution.

Benefits of Chapter 11 Bankruptcy

Filing for Chapter 11 bankruptcy offers a wide range of benefits to individuals and businesses facing financial distress. Here are some of the primary advantages of choosing Chapter 11 bankruptcy:

• Business Continuity: One of the key benefits of Chapter 11 is that businesses can continue operations while reorganizing their debts. This is particularly beneficial for business owners who want to avoid closing their doors and potentially losing everything.
• Debt Restructuring: Chapter 11 allows for the restructuring of debts, which can include reducing the total debt amount, extending repayment terms, and negotiating more favorable interest rates. This gives the debtor a better chance to get back on their feet.
• Automatic Stay: Once a Chapter 11 petition is filed, an automatic stay is put into effect, halting creditor actions like lawsuits, wage garnishments, and collection efforts. This gives the debtor immediate relief and time to restructure their financial situation.
• Discharge of Certain Debts: Through Chapter 11, certain debts may be discharged or modified, reducing the burden on the debtor. This can include renegotiating loan terms or eliminating unsecured debts, giving individuals or businesses more control over their finances.
• Flexibility in Contracts: Chapter 11 allows the debtor to reject or modify certain contracts that are deemed unprofitable or burdensome. This flexibility can be crucial for businesses looking to reduce operational costs and restructure effectively.
• Asset Protection: Unlike Chapter 7, where assets may be liquidated, Chapter 11 enables the debtor to retain their property and assets while reorganizing. This is particularly valuable for individuals and businesses with significant assets they wish to preserve.

Filing for Chapter 11 Bankruptcy in Los Angeles

The process of filing for Chapter 11 bankruptcy in Los Angeles involves several key steps, and working with an experienced Los Angeles Chapter 11 bankruptcy lawyer can make the process much smoother. At RHM LAW LLP, we help clients understand what to expect and ensure their filings are handled efficiently and effectively.

Here is an overview of the key steps in filing for Chapter 11 bankruptcy:

1. Consultation with a Bankruptcy Lawyer: The first step is to consult with an experienced Los Angeles Chapter 11 bankruptcy lawyer who will assess your financial situation, determine if Chapter 11 is the best option for you, and guide you through the process. Our attorneys at RHM LAW LLP offer free initial consultations to discuss your case.
2. Filing the Petition: The debtor (individual or business) must file a Chapter 11 petition with the bankruptcy court, along with various supporting documents, including a list of assets, liabilities, income, and expenses. This is the official start of the bankruptcy process.
3. Developing a Plan of Reorganization: Once the petition is filed, the debtor, with the help of their lawyer, will create a plan of reorganization. This plan will outline how the debtor intends to pay off creditors over time, which debts will be reduced, and any modifications to contracts.
4. Creditor Negotiations: During the Chapter 11 process, the debtor will negotiate with creditors to obtain their approval for the reorganization plan. Creditors may vote on the plan, and the court will oversee the negotiations to ensure fairness.
5. Court Confirmation: Once the reorganization plan is approved by creditors, the court will confirm the plan, allowing the debtor to begin implementing it. The debtor will then follow the terms outlined in the plan for the duration of the bankruptcy process.
6. Emerging from Bankruptcy: After successfully completing the reorganization plan, the debtor may emerge from bankruptcy with a fresh financial outlook. Debts may be discharged or restructured, and the individual or business will have a clearer path to future success.

To let us help you get started with the process, contact us today at (213) 344-0043.