Chapter 11 is designed to provide comprehensive reorganization of debts for businesses and corporations, or certain individuals.
Is Chapter 11 Right for You?
Chapter 11 for businesses (corporations, LLCs, LLPs, or other business entities)
Businesses that want to continue operation but face one or more of the following challenges, may benefit from a Chapter 11 filing:
• Heavy legacy debt that cannot be serviced due to current market conditions,
• Real estate or other assets that are over-encumbered,
• Expensive leases on unproductive or unnecessary property, or
• Other expensive financial obligations that make continued profitable operation impossible.
Chapter 11 for real estate oriented businesses:
Certain businesses (typically LLCs) are formed to own and operate commercial real estate. Declining commercial real estate prices have caused many such LLCs to have a negative net-worth, or face negative cash flows. Chapter 11 may be used to reduce the principal balance on the commercial real estate, and help steer the business towards profitability.
Chapter 11 for individuals:
Most individuals who file for Chapter 11 have income or debts that exceed the allowable limits under Chapter 13 and Chapter 7. Individuals who own investment properties that are worth less than their loan balance maybe be able to take advantage of Chapter 11 to reduce the balance on the investment properties. Additionally, an individual in Chapter 11 may be able to “strip” second mortgages on investment or residence real estate.
The video above are not created by The Fuller Law Firm, PC. The videos provide general information about bankruptcy. Some of the information in these videos may be inaccurate or out-dated. Also, some of the information may be irrelevant to California debtors. An informational video is not a substitute for receiving expert advice from an experienced attorney. Please contact us for a free initial consultation with an experienced attorney at The Fuller Law Firm, PC. We will be glad to give you advice tailored to your specific situation.
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