Chapter 11 bankruptcy is mostly used by businesses and corporations, although it is available to individuals as well. This type of bankruptcy provides the South Carolina debtor the opportunity to restructure their business so that their financial situation can be improved.
A Chapter 11 bankruptcy helps debtors reorganize their business or their personal assets and debts. The duration of the bankruptcy is dependent on the level of debt and the complexity of the business situation. It is the most complex of all types of bankruptcy and is also the most expensive. Companies that decide to opt for Chapter 11 bankruptcy do so after significant thought and analysis as well as a consultation with their South Carolina bankruptcy attorney. Only when they are sure it would be their best alternative, do they go for it.
Chapter 11 Bankruptcy and Commercial Businesses
Most people may be unaware of this, but if a business files for Chapter 11 bankruptcy, that does not mean the business is finished. Many big businesses including General Motors, Kmart, United Airlines and numerous other corporations have been through a Chapter 11 bankruptcy and have still managed to survive. In fact, when Kmart filed for Chapter 11 bankruptcy, there were many assumptions that the company was dead and that it was never going to regain its place in the retail arena. However, it was business as usual for Kmart, and the goal of undertaking a Chapter 11 was not because the company was going out of business, but to reorganize and become stronger.
Chapter 11 bankruptcy is thus more of a corporate solution, but individuals who have a lot of debt and who do not qualify for a Chapter 7 or a Chapter 13 bankruptcy can qualify for a Chapter 11 bankruptcy, as well.
Businesses can still be in operation while they are in the middle of filing Chapter 11. The only difference is that the debtor is considered to be a debtor in possession. In case there is any indication or incidence of fraud, incompetence or dishonesty, things may be handled differently, and a trustee may need to step in to help run the business throughout the duration of the bankruptcy proceedings.
As far as the reorganization plan is concerned, the business (or individual) has the right to propose the reorganization plan. This could include downsizing, laying off employees, liquidating assets, renegotiating debts, etc. If the plan proposed by the debtor is accepted by the court, the bankruptcy proceedings move further. However, in case the debtor has nothing to propose, or if the plan is unacceptable, the creditors can then suggest a plan.
Do I Need to Hire a South Carolina Attorney for My Bankruptcy Process?
Keep in mind that bankruptcy is a fairly complicated process. This is especially true if it is a Chapter 11 bankruptcy which can require significant documentation and planning. There are many rules and regulations to consider and many documents that need to be submitted, and many of these documents are quite technical.
If you live in South Carolina, the state courts will have a certain system in place that they will follow when dealing with bankruptcy cases. You will have to meet those expectations in order for your claim to be accepted, whether you choose to hire a bankruptcy attorney in South Carolina or not. This is why it is in your best interests to consult with a bankruptcy attorney so that you provide the courts with all the necessary documentation and you can fulfill all the basic requirements so that your bankruptcy application is handled smoothly.
Seek Legal Counsel from an Experienced South Carolina Bankruptcy Attorney
If you are a resident of Charleston or Myrtle Beach, South Carolina and are considering filing for bankruptcy, you can contact an experienced bankruptcy attorney at David Aylor Law Offices. Our legal team specializes in bankruptcy cases and has handled all types of bankruptcy proceedings as per our client’s requirements. We understand that Chapter 11 bankruptcy is very complex and there are many legal requirements that must be fulfilled in order for the courts to approve the application. The debtor has to propose a reorganization plan, and this is not something that businesses can take lightly.
You have to be well-prepared and you have to think in the long-term to ensure that any reorganization plan that you propose will provide your business greater stability once you’ve completed the proceeding. Most businesses tend to operate normally throughout this time, and for you to be able to do so, you need to make sure you handle the process smartly. Call us today at (843) 310-4900 and speak to our bankruptcy attorney in South Carolina who will be happy to assist you.