You may have heard Chapter 11 bankruptcy can help businesses in financial distress stay in business. But what is it? Essentially, Chapter 11 of the United States Bankruptcy Code establishes a process for businesses and individuals to reorganize their financial affairs. The Chapter 11 process is substantially more nuanced and complex than the procedures under Chapter 7 and Chapter 13. Therefore it is critical for debtors in cases under chapter 11 to have competent and experienced bankruptcy lawyers who stay abreast of the ever-evolving body of law and understand the interplay of the various dynamics and constituencies of commercial reorganization.

A skilled bankruptcy attorney will develop a strategy tailored to your unique circumstances. A strong bankruptcy strategy addresses the rights of creditors and the restrictions of the Bankruptcy Code. At Robleto Kuruce, our goal is to eliminate contested matters before a bankruptcy case is ever filed; in fact, we are often able to avoid bankruptcy altogether in favor of consensual debt workout.

However, when we must resort to filing a bankruptcy case, we first help our clients understand the process and prepare them for the path forward. We explain to our clients what is at stake – missing a filing requirement or a deadline in a Chapter 11 case can have negative consequences affecting your rights and assets. Consequently, when your business is facing financial distress, there is simply no substitute for high caliber legal talent.

Chapter 11 is designed for business debtors but certain consumer debtors may also reorganize under Chapter 11. The Bankruptcy Abuse and Consumer Protection Act of 2005 (the most significant overhaul of the Bankruptcy Code in recent years) put Chapter 7 out of reach for many highly compensated individuals by imposing a “presumption of abuse” for Chapter 7 debtors whose income exceeds a certain threshold. Likewise, Chapter 13 may be unavailable to an individual debtor whose noncontingent, liquidated secured and unsecured debts exceed certain limits. The Scylla and Charybdis of those limitations to debt and income typically mean that individuals engaged in business find Chapter 11 the only form of bankruptcy relief available to them.

Those considering how a Chapter 11 bankruptcy case might impact their businesses or personal affairs should consult with an experienced insolvency lawyer. Insightful and creative bankruptcy counsel may mean the difference between successful reorganization and a fresh start or continued legal trouble and financial difficulty. When the stakes are high, you deserve your best chance to restructure. Rely upon the skill and experience of Robleto Kuruce.