Services for Chapter 11 of the Bankruptcy Code in new york
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How Does Chapter 11 of the Bankruptcy Code Work?
Chapter 11 lets you pay back your creditors, in whole or in part, over an extended period of time.
Chapter 11 lets you accomplish almost everything you can in Chapter 7 or Ch.13. Plus much more. You can strip down principal balances on Cars and Mortgages on investment property. Reduce the Interest, wipe out arrearages and re amortize the loan. You can remove 2nd and 3rd mortgages and judgment liens from underwater properties such as your home.
You can catch up payments owed to the IRS owed or your state taxing authority including property taxes. Unlike Chapter 13, there are no limitations on the amount of debt or its type, to qualify for Chapter 11.
The filing of a Chapter 11 will stop pending foreclosures and all other lawsuits and almost all collection activities like letters and collectors calling. It will stop wage garnishments just like Ch.7 and Chapter 13. It will stop bank attachments, liens and levies (even the IRS or State Taxing Authorities Levies).
Sounds too good to be true? Its not. That is what a Chapter 11 filing is designed to do. A Chapter 11 starts when your petition is filed with the United States Bankruptcy Court. Documents relating to your income and expenses, debts property, (Real Estate & Personal Property) and other financial disclosures must be prepared and filed.
Most Chapter 11's take between 6-12 Months to be approved by the Bankruptcy Court. The new Chapter 11 Sub V’s designed for small businesses, that plan is to be filed within 90 days of the filing of the petition. It is much faster then a traditional Chapter 11. The New Ch.11 Sub Chapter V also has a debt limit-$7.5 million until March of 2022. If Congress does nothing, it reverts back to 2.7 million. Chapter 11 Sub Chapter V is designed for smaller businesses with an eye towards hopefully keeping the costs down for the business so they can afford the opportunity to get re-organized under Chapter 11 of the United States Bankruptcy Code and be afforded its protections from creditors.
Filing Fees for Chapter 11 as of 12/1/2020 are $1738.00. Retainers and fees in a Chapter 11 case are substantial, usually starting at $20,000.00 or more. Your attorney fees must be approved by a United States Bankruptcy Judge. Your attorney files periodic fee applications for fees. All money you give your attorney must be held in trust until earned.
We have filing privileges in United States Bankruptcy Court for the Following Jurisdictions: Eastern District of Wisconsin. (Milwaukee/Green Bay) Northern District of Illinois (Chicago/Rockford). Southern District of New York (SDNY) (Manhattan/Bronx). Eastern District of New York EDNY (Brooklyn, Queens, Staten & Long Island).
CRITICAL DOCUMENTS FOR A SUCCESSFUL CHAPTER 11:
A business needs authority to file for Ch.11 Bankruptcy protection. Usually we are working with smaller LLC’s or corporations and or Individuals. Regardless of the size of the business we need authority to file for Bankruptcy and for someone to be the point person to sign the Chapter 11 bankruptcy schedules, testify at the meeting of creditors, and co-operate with us and the office of the United States Trustee and Ch.11 Trustee (Sub Chapter V cases mostly). Throughout the process. We can prepare corporate authorizations.
Insurance is a must have for any business. There are all kinds of businesses who need Chapter 11 Bankruptcy Protections, from restaurants to fitness centers to retail, but all businesses should have insurance on any vehicles, equipment, and other assets including real estate it owns, as well as workers compensation insurance and other insurance for employees.
TAX RETURNS AND FINANCIAL STATEMENTS
Financial statements or balance sheets for the past few years are needed in order to evaluate whether a business or individual will survive and thrive during a Chapter 11 Bankruptcy case. You will need to get your attorney any financial statements or balance sheets, especially if they were submitted to banks or other creditors. Tax returns are also necessary. It is critical for businesses and individuals going through the Chapter 11 process to know what there tax liabilities are at filing and to stay on top of all income tax filings as well as sales, use, payroll, and other taxes. We can help businesses in Chapter 11 file the required motions to get accountants to be hired to help manage their tax obligations.
PROJECTIONS FOR INCOME
Projections for income are often the hardest to prepare for businesses in Ch.11, especially businesses who have been operating at less then full capacity for reasons including Covid-19 or lack of employee availability. Ultimately a business in Chapter 11 needs cash flow in order to pay through a Ch.11 plan and convince creditors and a Bankruptcy Judge it can reorganize successfully.
While document requirements vary from case to case, these items are often the most critical if your business is in crisis. Contact Us to set up a initial consultation and discuss if Chapter 11 is the right course of action. We will educate you about Chapter 11, your role, our role as your legal counsel and what you can expect to happen. DO NOT TRY THIS BY YOURSELF.
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