Fresno Chapter 11 Lawyers

Debt Reorganization for Business Owners

At Fear Waddell, P.C., we have filed more than 1,000 bankruptcy cases in the last decade. Unlike many Chapter 11 bankruptcy lawyers in Fresno, we handle both business and consumer bankruptcies, giving us extensive experience with Chapter 11. After carefully evaluating your financial position, we can help you decide which option is right for you.

Want to know if Chapter 11 is the solution for your business? Learn more about how we can help by contacting our Fresno bankruptcy lawyers today.

What Is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is a “reorganization” for businesses that allows them to keep operating while creating a plan to repay creditors.

Generally, Chapter 11 is more complicated and expensive to file than other chapters. Additionally, some debts that can be discharged in a Chapter 13 bankruptcy cannot be discharged under Chapter 11. Some business owners attempt to file Chapter 11 on their own and with minimal success. They may not be able to create a reasonable repayment plan, and if they have too much debt or too little income, the proceeding may need to become a Chapter 7 or Chapter 13 instead.

What are the Benefits of Chapter 11 Bankruptcy?

If you are facing financial struggles as a business owner, it is important to know your options. Benefits of Chapter 11 bankruptcy include:

• Your business can continue to operate while paying off debts.
• Allows debtors to partially pay back unsecured debts.
• The automatic stay judgment gives you freedom from harassing creditors contacting you.
• Ability to restructure secured debts so your payments can be lower and spread over a longer period of time.
• No debts that are considered non-dischargeable.

Our attorneys have a thorough understanding of this process, and we can use our years of experience to determine whether Chapter 11 is right for your business. Due to our meticulous attention to detail and specialized bankruptcy knowledge, you will have a much greater likelihood of success if you work with our team.

What Happens When a Business Files for Chapter 11?

A business may choose to file for Chapter 11 bankruptcy when they need time to restructure their debts. With Chapter 11, the company’s assets will remain protected as they negotiate new terms with their creditors. The goal is to pay off debts so the business can survive and function on a much healthier basis.

Some business owners also use Chapter 11 to:

• Sell specific assets
• Position the company to be sold
• Conduct an orderly liquidation

Most companies that file Chapter 11 bankruptcy intend to continue business as usual during its negotiations with its creditors to reorganize its debt. Although many of the business’s actions require approval from the bankruptcy judge, the company’s creditors must also get permission from the court to take any action against them.

Can Chapter 11 Work for Small Businesses?

Traditionally, Chapter 11 bankruptcy has benefited large corporations much more than small businesses. According to studies from recent years, only 10 to 15% of Chapter 11 cases have been a success. Most of the cases were either dismissed or converted to Chapter 7 liquidations.

However, the Small Business Reorganization Act of 2019 added Subchapter V to Chapter 11, which is geared specifically toward small businesses. As of February of 2020, small business owners can use a version of Chapter 11 bankruptcy that affords several unique advantages, including:

• The opportunity to create a repayment plan without creditor approval
• A streamlined, cost-effective version of Chapter 11
• The potential to cramdown certain loans (including mortgages in specific circumstances)

You will need to have less than a certain threshold of debt in order to qualify for this version of Chapter 11. Our experienced bankruptcy law firm is here to evaluate your situation and determine if this option could work for your company.

Our Lawyers Can Help You with Chapter 11

You'll find that Fear Waddell, P.C. is big enough to tackle the most complex cases but small enough to maintain the personal touch. Two of our Fresno attorneys are certified specialists in bankruptcy law by the State Bar of California. They teach other lawyers throughout central California about the intricacies of bankruptcy law. If this is the experience and expertise you want to guide your financial future, contact our firm today by filling out a free consumer case evaluation.

Call (559) 418-3022 to reach our office in Fresno, CA. Your initial consultation is free.