California Chapter 11 Bankruptcy
Chapter 11 bankruptcy is also known as business bankruptcy. This Chapter of bankruptcy law allows businesses to reorganize their debts under the protection and direction of a bankruptcy court. While individuals can file for Chapter 11 under certain circumstances, it is usually used by companies that either wish to liquidate their business and discharge their debts or regain control of their finances so that their business can continue on.
Chapter 11 is a way for all types of businesses to reorganize their debt and can be filed for by large corporations and sole proprietorships alike. Chapter 11 does not have to end in a business being shut down, though that can be the case in certain circumstances. In many situations, businesses will use Chapter 11 bankruptcy to try to organize their debts, cancel certain contracts, and create a plan for staying in operation.
How Does Chapter 11 Bankruptcy Work?
When a company files for Chapter 11 bankruptcy, a trustee is appointed by the courts to take over control of the business until the case is completed. In most cases the trustee will simply be the owner of the business, who is then considered the debtor-in-possession. If the company has broken laws or acted fraudulently, a bankruptcy court might make someone outside of the company the trustee until the bankruptcy proceedings are completed.
Once a San Diego Chapter 11 case has begun, all financial claims against the company are stayed until the proceedings are completed. This means that creditors of the company and anyone with a financial complaint against the company must desist from harassing or contacting the business in any way, and must instead direct their complaints to the bankruptcy court. The bankruptcy court will then work with the company to create a plan for reorganizing and repaying the company’s debts.
Anyone can propose a reorganization plan during a San Diego Chapter 11 case, but the plan must then be approved by the court and the company’s creditors. A San Diego bankruptcy lawyer, such as Attorney Orona, can create reorganization plans for businesses and present plans to the court. San Diego bankruptcy attorney, Scott Orona, can also offer legal counsel regarding any other plans that are proposed by creditors.
Why Hire a Chapter 11 Bankruptcy Attorney?
Chapter 11 bankruptcy cases can become quite complicated, particularly when the company is trying to remain in operation. If your company is facing Chapter 11, a bankruptcy lawyer can help you navigate the process and come to a fair resolution.
Attorney Scott Orona has years of experience helping businesses and individuals file for bankruptcy in the San Diego area. He can work with you to determine whether bankruptcy is the right choice for your business and guide you through the process. Take the time to get your questions answered by setting up a free one hour consultation with Attorney Orona by calling 619-306-7627. He will review the financial circumstances surrounding your business, listen to your economic objectives and advise you of the next steps you need to take to protect your company from further hardship.