Debt Reorganization and Business Bankruptcies

Struggles with debt are common for many different types of smaller businesses in South Florida, from restaurants and bars to retail stores and client-focused businesses that provide a wide range of services. For some businesses struggling with debt, the only option may be to file for Chapter 7 bankruptcy — a type of liquidation bankruptcy that can allow the business owners to liquidate business assets to repay creditors as fully as possible and to close down the business permanently. Yet there are also many small businesses that simply need help reorganizing debt and catching up with creditors. When businesses have a plan for increasing revenue and/or reducing costs so that the business can thrive down the road, a reorganization bankruptcy is often beneficial.

With a reorganization bankruptcy, a business can remain open throughout the bankruptcy case, make a plan to reorganize debt, and repay creditors over a period of time. There are many different kinds of reorganization bankruptcies for businesses, so it will be essential to discuss the details of your specific business with an attorney. In the meantime, our West Palm Beach bankruptcy lawyers can provide you with more information about types of reorganization bankruptcy that could be available to your business.

Chapter 11 Bankruptcy 

Chapter 11 bankruptcy is one of the most common forms of reorganization bankruptcy for businesses of all sizes. There is no debt limit associated with it, but it is also among the most complex and expensive types of reorganization bankruptcy for a business. While Chapter 11 can be a great option for businesses, it is possible that your business could be eligible to file for a less complex and more streamlined type of reorganization bankruptcy (and, if not, Chapter 11 bankruptcy will likely be available to you).

Subchapter V Bankruptcy 

Subchapter V bankruptcy is a sub-type of Chapter 11 bankruptcy specifically designed for smaller businesses with limited debt. To find out about your eligibility, you should get in touch with a lawyer.

Chapter 12 Bankruptcy 

Somewhat similar to Subchapter V, Chapter 12 bankruptcy is a less expensive and less complex type of reorganization bankruptcy for businesses, but it is only available to businesses that fit the definition of a family farmer or fisherman.

Chapter 13 Bankruptcy 

Chapter 13 bankruptcy is a type of reorganization bankruptcy designed specifically for consumers (and not for businesses). However, when a business is structured as a sole proprietorship, there is no distinction between the business as an entity and the owner for bankruptcy purposes — the sole proprietor (i.e., the individual owner who is also a consumer) and the sole proprietorship (i.e., the business) are one and the same. Accordingly, if a sole proprietor is considering a reorganization bankruptcy for their business, they can usually file for Chapter 13 bankruptcy, but it is important to understand that all individual assets and debts will become part of the bankruptcy case along with the business assets and debts.

Contact Our West Palm Beach Bankruptcy Attorneys Today 

Do you need help determining the best type of reorganization bankruptcy for your business? An experienced West Palm Beach bankruptcy lawyer at Kelley, Kaplan & Eller can speak with you today to learn more about your business and how it is structured, and to provide you with information about eligibility for different types of reorganization bankruptcy. Once you are ready to file, our firm is here to assist you throughout your bankruptcy case. Contact us today for more information.

Source:

law.cornell.edu/uscode/text/11