Chapter 11 Bankruptcy Eligibility Attorney in City, State
Businesses may, at times, discover that it is essential to reorganize their debt load to emerge as more viable and profitable businesses. Filing for bankruptcy does not automatically imply that you will lose your business. In fact, it can be a way to re-establish your company’s success through financial relief.
If you are considering filing for Chapter 11 bankruptcy to save your business, our Chapter 11 bankruptcy eligibility attorney in Columbus, Ohio, may help you evaluate your qualifications.
Let’s begin talking about your debt-free future. Please speak to us now and set up a free consultation!
Why do I need a Chapter 11 Bankruptcy Eligibility Lawyer in Ohio?
When filing for bankruptcy under Chapter 11, you should seek legal help from a credible bankruptcy attorney. Your lawyer will begin by determining the most crucial aspect, whether you are eligible or not for Chapter 11 bankruptcy.
Sheppard Law Offices, an experienced Chapter 11 bankruptcy eligibility attorney in Columbus, can help you:
- Compile critical financial documents,
- Evaluate your financial circumstances, and
- Assess if you meet all the qualifications before filing.
If there is paperwork that needs to be completed or eligibility requirements that need to be satisfied, we can handle it for you. From our initial consultation to finally achieving bankruptcy relief, you can count on us to put forward your best interest.
Bankruptcy is a complex process. And you need a reliable bankruptcy lawyer who can make it seamless and smooth for you. What are you waiting for? Speak to us now!
What is Chapter 11 Bankruptcy?
When businesses are in a position where they are unable to make their financial obligations but are still committed to finding a means to keep their operations running, they frequently seek protection under Chapter 11 of the United States Bankruptcy Code.
Chapter 11 bankruptcy is also referred to as “reorganization” bankruptcy because it enables debtors to reorganize their obligations into payments that are easier to manage, pay back their creditors over a period of time, and protect their assets from being liquidated.
After declaring bankruptcy, a business submits a suggested reorganization plan, which may include the following components:
- Reducing expenses
- Seeking to find new ways to generate income
- Putting off payments to creditors for a short period
- Strategies and ideas for profitability
Who Are Eligible to File for Chapter 11 Bankruptcy?
No restrictions or limits are imposed on the amount of debt or income you have to be eligible for Chapter 11 bankruptcy. Seeking legal help from a credible Chapter 11 bankruptcy eligibility lawyer in Ohio is recommended to determine your business eligibility fully.
Owners of any kind of business can submit a petition for bankruptcy under Chapter 11, including the following sorts of businesses:
- Sole proprietorships
- Small businesses
- Large national corporations
Creditors have the option of filing for bankruptcy under Chapter 11. It is referred to as an “involuntary petition” if the creditors decide to file. Regardless of who submits the petition, the company itself is the entity that is going through the bankruptcy procedure.
It is also possible for individuals to file for bankruptcy under Chapter 11. However, this is a much less popular option due to the high expenses and stringent procedures associated with a Chapter 11 case. It is typically filed by individuals with too much debt to file for Chapter 13 bankruptcy.
Chapter 11 Eligibility for Small Businesses
If you own a relatively small company, you might have more flexibility in certain areas. You have the option to file for Chapter 11 bankruptcy under the following:
- Small Business Reorganization Act of 2019 (Subchapter V)
- Bankruptcy Abuse Prevention Consumer Protection Act of 2005 (Small business case)
Eligibility for Subchapter V of Chapter 11 Bankruptcy Code
Previously, only large firms could afford the costs of filing for bankruptcy under Chapter 11 of the United States Code. Last 2019, Chapter 11 was expanded, and it can now assist both large and small enterprises in continuing operations.
Two conditions need to be satisfied before a small business can become eligible to file for a bankruptcy case under Subchapter 5 of the United States Code:
- A business or corporation must be actively conducting business, and its total debt cannot exceed $2.75 million. Insider debts are not permitted.
- At least half of the total debt must be made up of earnings from the business operations. Businesses solely involved in the ownership and management of one property are not permitted.
If you wish to file for Chapter 11 bankruptcy under subchapter V, a skilled chapter 11 bankruptcy eligibility attorney in Columbus can help you assess if your company is eligible. Call us to learn more!
Eligibility for Small Business Case of Chapter 11 Bankruptcy Law
There are also different eligibility criteria and debt limits for small business cases under Chapter 11 bankruptcy which include:
- The debtor must be actively involved in commercial or business activities (other than primarily owning or operating a single piece of real property) and have total secured and unsecured debts that do not exceed $3,024,725; additionally, the debtor must not have a negative net worth.
- Earnings from the operations of the business have to constitute at least half of the entire repayment plan. Companies whose operations consist entirely of the ownership and management of a single property are not allowed.
Can Anyone File for Chapter 11 Bankruptcy in Ohio?
It is essential to take note that, according to Chapter 11 of the United States Bankruptcy Law, neither individuals nor businesses are allowed to seek protection under Chapter 11 if the following conditions are met:
- They had already filed for bankruptcy during the previous 180 days. Still, that petition was thrown out because of their deliberate refusal to attend court or comply with directions from the United States bankruptcy court.
- Within the previous 180 days, they submitted another bankruptcy case. Still, it was voluntarily dropped because a creditor petitioned the United States bankruptcy court for assistance in recovering property against which the creditor held a claim.
Required Documentation to Submit When Filing Chapter 11
Eligible businesses are required to file the following paperwork with the United States bankruptcy court:
- The most recent audited financial statement
- Report of business activities
- Statement of cash flow
- The most recent filing of taxes to the federal government
Call our Seasoned Chapter 11 Bankruptcy Eligibility Attorney in Columbus, Ohio, Now!
If you cannot pay your debts but wish to save your business, Chapter 11 bankruptcy may be beneficial. Whether you’re filing as an individual, sole proprietor, or established business entity, a knowledgeable Chapter 11 bankruptcy eligibility attorney can help you understand your qualifications, rights, and obligations.
We at Sheppard Law Offices understand that it only takes one change in life to throw you into a financial crisis. Our Columbus bankruptcy attorneys can advise you on how to proceed, including whether filing for Chapter 11 bankruptcy is wise. If you or your loved ones have issues involving tax, estate planning, and divorce, we are just a call away.
We’ll help you decide whether Chapter 11 bankruptcy is your best option. Give our trusted Ohio law firm a call now, and let’s begin this journey to financial freedom!