Chapter 11 Bankruptcy Lawyers in Phoenix
Providing Attentive, Personalized Bankruptcy Services to Small Business Owners
Larger bankruptcy firms treat every client like just another number. After you’ve retained their services, you may go months without hearing from them. And if you do, it will likely be a paralegal or another third party who can’t offer advice or answer any of your questions.
But we do things differently.
At The Gavel, we recognize that when you hire us, we’re part of your team – not the other way around. We remain easily and personally accessible to every client and are always willing to speak with you, answer your questions, and provide timely updates and wise counsel. Because we have extensive legal experience helping small business owners like you, we can help you effectively navigate even the most complex Chapter 11 cases.
What Is Chapter 11 Bankruptcy and How Does It Work?
Chapter 11 bankruptcy is available to all kinds of business entities, and, in very limited cases, individuals. Filing for Chapter 11 bankruptcy gives debtors time to organize their assets and business operations so as to restructure their debt and start fresh. Taking the Chapter 11 route allows businesses to continue operating after filing for bankruptcy (which is critical, because Chapter 11 bankruptcies tend to take several years).
Once you file, you are required to propose your own plan, which typically includes:
- Altering your business operations to cut costs
- Potentially downsizing
- Reorganizing your business debts into a manageable payment plan
How Will Filing for Chapter 11 Bankruptcy Affect My Business?
After filing for Chapter 11 bankruptcy, you can likely continue running your business as you normally would, with a few limitations. For instance, you are generally not permitted to sell or liquidate any major assets, make or break any significant leases, take out new loans, halt any important operations, or expand your business in any way without court approval.
In February of 2020, Subchapter V of Chapter 11 became available to qualifying small businesses. If you owe less than $2,725,625* (at least 50% of which was accrued through commercial expenses), you may be able to use Subchapter V to avoid the traditional costs and time-consuming procedures within Chapter 11. Congress created Subchapter V because small businesses have not been able to benefit from Chapter 11 the way large corporations have. If you qualify, you will have a greater chance of reducing your debt without going out of business.
*Until March of 2021, the Subchapter V debt threshold is $7,500,000, rather than $2,725,625. This temporary increase is due to a provision in the CARES Act, created to help businesses survive the financial effects of COVID-19.
Business and individual solutions!
Custom tailored solutions for your case.
Accessibility to a legal team that is rooting for you.
High level of quality service & genuine care for your success.
Chapter 11 bankruptcy is most commonly filed by large corporations because the process can be exceedingly expensive. As such, you must speak with an experienced bankruptcy attorney before making any decisions. Choosing the wrong type of bankruptcy or failing to take advantage of an alternative means of debt repayment could be a death knell for your business, so it is imperative that you bring in a seasoned bankruptcy professional to help you weigh all your options before moving forward.