Abogados de Chapter 11 Bankruptcy

Understanding Chapter 11 Bankruptcy Lawyers in the United States

What This Practice Area Covers

Chapter 11 Bankruptcy is primarily used by businesses to reorganize their debts and continue operating. It allows companies to restructure their financial obligations while keeping creditors at bay. This type of bankruptcy can also be utilized by individuals with substantial debts and assets, though it's less common. Lawyers in this field help navigate the complex legal landscape, ensuring compliance with court procedures and maximizing the benefits of the restructuring process.

When to Hire a Lawyer

• When your business is struggling to meet its financial obligations and needs a structured plan to repay debts.
• If creditors are threatening legal action or attempting to seize assets.
• When you need to negotiate new terms with creditors to keep your business running.
• If you're considering restructuring your business operations to improve profitability.
• When you require expert guidance on the legal and financial implications of filing for Chapter 11.

How the Process Works

Filing for Chapter 11 begins with a petition in bankruptcy court. The debtor typically remains in control of the business as a "debtor in possession," but must follow the court's rules. A proposed plan of reorganization is submitted, outlining how debts will be repaid. Creditors can vote on this plan, and the court must approve it. This process can take several months to a few years, depending on the complexity of the case. According to the American Bankruptcy Institute, about 10-15% of Chapter 11 cases result in a confirmed reorganization plan.

How Compensation is Calculated

• Hourly Rates: Lawyers may charge by the hour, with rates varying based on experience and location.
• Retainer Fees: An upfront fee is often required to secure legal services.
• Flat Fees: Some lawyers might offer a flat rate for specific services within the bankruptcy process.
• Contingency Fees: Rare in bankruptcy cases, but possible if there's a significant outcome at stake.

Frequently Asked Questions

What is the difference between Chapter 11 and Chapter 7 bankruptcy?

Chapter 11 is focused on reorganization and allows businesses to continue operating while repaying debts over time. Chapter 7, on the other hand, involves liquidating assets to pay off debts and typically results in the closure of the business.

Can individuals file for Chapter 11 bankruptcy?

Yes, individuals can file for Chapter 11, especially if they have significant assets or debts that exceed the limits for Chapter 13. However, it's more complex and costly, making it less common among individuals.