Not all businesses are successful as soon as their doors open. It is common for new businesses to struggle in their first few years. However, even if you have an established business, with inflation, cost of living increases, and in some instances, unforeseen health or medical emergencies, your business could rapidly accrue debt that makes it difficult or impossible for you to stay afloat. When you want to keep your doors open, filing for Chapter 11 bankruptcy in Florida could be the right choice for you.
Although you may be hesitant to consider such an extreme measure, make sure you get the legal advice of an experienced professional. Our Florida Chapter 11 bankruptcy attorneys at The Rivera Law Firm can review your finances, determine if alternative arrangements can be made, and help you figure out how to escape financial instability through bankruptcy. Get your business back on track with The Rivera Law Firm. Call us today for an initial consultation so we can review the circumstances of your case and get your repayment plan in motion.
Understanding Chapter 11 Bankruptcy in Florida
Chapter 11 bankruptcy differs from other types of bankruptcy in that it is used by businesses, sole proprietors, corporations, and other similar parties to repay their debts. Generally, these parties will pursue Chapter 11 bankruptcy instead of closing their businesses to pay off their creditors and start building up their business’s finances. Your bankruptcy lawyer in Florida can review your business’s finances to determine whether Chapter 11 bankruptcy is the best option.
Eligibility for Chapter 11 Bankruptcy
There are no income or debt requirements or limitations for filing for Chapter 11 bankruptcy under the federal bankruptcy code. You can file Chapter 11 bankruptcy as a business or individual, based on your specific needs. For example, if you have an LLC, partnership, or corporation, you may qualify for Chapter 11 bankruptcy.
However, individuals with debts greater than the maximum debt limit allowed in Chapter 13 bankruptcy can pursue a Chapter 11 bankruptcy declaration in certain circumstances. You might also choose Chapter 11 bankruptcy if you are an individual with a complex financial situation, such as substantial assets.
With Chapter 11 bankruptcy, you must be prepared to attend credit counseling and meet the terms of your designed repayment plan for any remaining debts to be discharged once you have fulfilled the payment plan requirements. If you are unable to do so, you may need to work with a Florida Chapter 7 bankruptcy lawyer to convert your Chapter 11 bankruptcy petition or modify your existing Chapter 11 repayment plan.
How the Chapter 11 Process Works in Miami and West Palm Beach
Once you decide that a bankruptcy case is the best option for your business, you can work with your attorney to get the necessary documents and paperwork filed. You should be prepared to complete a disclosure document describing your family and business income and expenses. Any disposable income must be used to pay back your creditors as laid out in your reorganization plan.
You can keep your business open, but the bankruptcy court will need to approve any major business decisions, such as:
- Entering contracts
- Expanding business
- Shutting down the business
- Breaking a lease
- Selling business assets
Once you file bankruptcy, an automatic stay will be in place that prevents creditors from attempting to collect outstanding debts according to state and federal bankruptcy law. Payments will be made to your bankruptcy trustee, who will then ensure creditors are repaid over the terms of the repayment plan. Once you have fulfilled the terms of your bankruptcy reorganization plan, any remaining debts will be discharged, and your case will be closed.
Your West Palm Beach Reorganization Plan
You can work with your Chapter 11 bankruptcy lawyer to craft a reorganization plan that meets your needs. However, when creating the plan, it is important to remember that the bankruptcy court must approve your plan before your petition can be granted. Some of the requirements of a Chapter 11 bankruptcy reorganization plan include:
- The plan is created in good faith
- The repayment plan is feasible
- The repayment plan is equitable and fair to creditors
- The repayment plan is in the best interests of the creditors
Who Should File for Chapter 11 Bankruptcy in West Palm Beach or Miami?
If you live in Miami or West Palm Beach and are considering Chapter 11 bankruptcy, you can visit the United States Bankruptcy Court for the Southern District of Florida. This court covers several counties in Florida, including Miami-Dade County and Palm Beach County. There are several potential locations you could visit, including the following locations in Miami:
- Wilkie D. Ferguson, Jr. U.S. Courthouse
400 North Miami Avenue
Miami, FL 33128
- C. Clyde Atkins U.S Courthouse
301 North Miami Avenue
Miami, FL 33128
- James Lawrence King Federal Justice Building
99 N.E. Fourth Street
Miami, FL 33132
Or the West Palm Beach courthouse, located at:
- Paul G. Rogers Federal Building and U.S. Courthouse
701 Clematis Street, Room 202
West Palm Beach, FL 33401
If you are unsure whether bankruptcy is the right call for your case, discuss your finances in detail with our experienced Chapter 11 bankruptcy attorneys at The Rivera Law Firm. Generally, if you have the means to repay your debts but need help formulating a repayment plan to avoid additional interest that will hold you back, bankruptcy may be a good option. However, if you do not have sufficient income from your business or employment, and your debt is less than the maximum amount allowed under a Chapter 13 repayment plan, Chapter 7 or Chapter 13 bankruptcy may be a better option.
Chapter 11 Bankruptcy FAQ
We understand how overwhelming the bankruptcy process can be. For that reason, we have answered some of the most frequently asked questions surrounding Chapter 11 bankruptcy and bankruptcy petitions below. If you have additional questions we did not answer on this page, please contact our team and discuss your business finances further.
What is the difference between Chapter 7 bankruptcy and Chapter 11 bankruptcy?
The primary difference between Chapter 7 bankruptcy and Chapter 11 bankruptcy is that Chapter 7 bankruptcy requires you to liquidate your assets and sell the proceeds to pay off your creditors. In contrast, Chapter 11 allows you to pay off your creditors over time without liquidating your assets. This can help you settle your business finances so you can remain open.
What are the different types of bankruptcy?
There are several types of bankruptcy options available based on each individual’s and business's financial needs. They include:
- Chapter 7 bankruptcy (also called liquidation bankruptcy for individual debtors)
- Chapter 9 Bankruptcy (for municipalities)
- Chapter 11 bankruptcy (for businesses or individuals)
- Chapter 12 bankruptcy (for farmers)
- Chapter 13 bankruptcy (for individuals repaying debts)
- Chapter 15 bankruptcy (for international bankruptcies)
What are the benefits of Chapter 11?
- Being able to remain open for business
- Obtaining an automatic stay
- Paying off debt while generating cash flow
Get Help From a Florida Chapter 11 Bankruptcy Lawyer
Although you may have always assumed that declaring bankruptcy would mean your business has failed, it could be the solution you have been looking for to get your business back on track and avoid further financial ruin.
Start working on your bankruptcy declaration and repayment plan with help from an experienced Florida Chapter 11 bankruptcy attorney at The Rivera Law Firm and get the legal representation you need to get through these difficult times. Schedule your free consultation today when you fill out our quick contact form or call our office.