At Lydecker Diaz, our Orlando bankruptcy attorneys have years of experience representing debtors and creditors in both state and federal bankruptcy courts. Our team of bankruptcy attorneys in Orlando are fully knowledgeable, dedicated, and specialize in Chapter 11 and Chapter 13 bankruptcy in Orlando.
What is Chapter 11 Bankruptcy?
Chapter 11 refers to the eleventh chapter in the United States Bankruptcy Code that allows reorganization of business assets and debts. Every business, corporation, or partnership is able to file for Chapter 11 bankruptcy as a means of business restructuring.
Although it is a much more involved process than other forms of bankruptcy, individuals can also file for Chapter 11 bankruptcy if their debts exceed the qualifications of Chapter 7 and Chapter 13.
Why File For Chapter 11?
Most corporations file for Chapter 11 when they are struggling to pay or completely unable to pay debts to creditors. Chapter 11 allows business to get a fresh start and relief from insurmountable debt.
What Happens During A Chapter 11 Bankruptcy Case?
Chapter 11 bankruptcy cases start with a petition that is filed by indebted corporations in a state, federal, or bankruptcy court. Generally, companies will file Chapter 11 where the business is located. Creditors may also start the petition to file for Chapter 11 in hopes of getting an early resolution from debtors.
During most Chapter 11 bankruptcies, the debtor continues to operate the business but loses most of the control over the most important business decisions and is usually barred from altering or entering new contractual agreements pertaining to the business. However, bankruptcy courts are entitled to grant a trustee full control of the business if there is any evidence of fraud, ineptitude, or negligence by the debtor.
After filing the petition, the debtor has four months to present a business reorganization plan. Once the plan is presented to the court, the court will then decide whether to confirm the plan. The confirmation of the Chapter 11 plan is based on whether it is plausible, legal, in the best interests of the creditors, and if it is fair and equitable.
What is Chapter 13 Bankruptcy?
Chapter 13 allows debtors to repay only a portion of what is owed over the course of a few years and it allows them to retain their major assets. Chapter 13 is an excellent solution for debtors but there are qualifications for eligibility.
Eligibility for Chapter 13
Only an individual may file for Chapter 13 bankruptcy and this is true for the most part. However, the sole proprietor of a business may include debts that pertain to their business in a Chapter 13 bankruptcy.
To qualify, an individual must be:
- Employed and able to afford the repayment plan
- Current with their taxes
- Under 1.2 million of secured debt and under $400K of unsecured debt
Contact the Lydecker Diaz Bankruptcy Attorneys in Orlando
At Lydecker Diaz, our bankruptcy lawyers in Orlando are well versed in all aspects of bankruptcy law and are dedicated to ensuring our clients’ best interests. Contact us today to schedule a legal consultation or for more information on Chapter 11 and Chapter 13 bankruptcy law.