Chapter 11 Bankruptcy Lawyer Serving Cleveland, OH
While Chapter 11 bankruptcy is not limited just to business owners, it is a vital tool for companies to keep their doors open while they reorganize their debts and repay their obligations over time. If you run a small-to-medium-sized business in Cleveland and are confident that your business will return to profitability in the future, filing for Chapter 11 bankruptcy could be the right tool to help protect the company you’ve worked so hard to build.
If you’re considering filing for Chapter 11 bankruptcy, contact Amourgis & Associates, Attorneys at Law, today. Our Cleveland bankruptcy attorneys are ready to help find effective solutions to the challenges you are facing. With years of experience helping people just like you achieve financial freedom, we have the right knowledge and skills to help you get back on track.
Take the first step. Call us or contact us online for a free consultation to discuss your situation and your options today.
What Is Subchapter V of Chapter 11 Bankruptcy?
Subchapter V is a relatively new part of Chapter 11 bankruptcy that can help some small businesses. It was added by the government in 2019 and focuses on small businesses that typically don’t have the resources to reorganize under Chapter 11.
Small businesses that reorganize under Chapter 11 Subchapter V face fewer hurdles in their bankruptcy, assuming they meet certain eligibility requirements. If a business qualifies for Subchapter V, it may have a different experience from another business going through a standard Chapter 11 bankruptcy.
A few ways that a Subchapter V case is different from a standard case include:
There is no creditors’ committee as in a typical Chapter 11 bankruptcy.
The court appoints a trustee to review business finances and the bankruptcy plan.
Only the organization going through bankruptcy can file a plan, unlike a normal Chapter 11, where creditors can also do this.
Business owners may continue to hold equity and run the business.
Organizations going through a Subchapter V bankruptcy only have 90 days to file their plan.
Subchapter V can be significantly different, including requiring fewer procedures and lower costs than a regular Chapter 11 filing. By allowing small business owners to lower the cost of their bankruptcy while allowing them to retain ownership and control, Subchapter V can be an essential way for owners to save their business.
What Are the Advantages to Filing for Chapter 11 Bankruptcy in Cleveland?
Chapter 11 is different from other types of bankruptcy and can have important advantages, depending on your situation.
If you’re considering a Chapter 11 bankruptcy, it’s important to know some of the key benefits:
- An automatic stay can protect you or your business from repossession, foreclosure, and other actions.
- Chapter 11 bankruptcy in Cleveland allows debtors to build a debt repayment plan to keep their business operational.
- You may retain control of a business and help it recover from its debts.
- You may be able to defer debts that you or your business owe in accordance with a plan.
- You may be able to restructure debt and certain contracts that affect your business and its daily operations.
These and many other advantages may apply to a Chapter 11 case that’s filed in Cleveland. If you have questions about how Chapter 11 may work for you, speak with our Cleveland bankruptcy attorneys about your situation. We can advise you on whether Chapter 11 would work for you and what steps you’ll need to move the process forward.
Cleveland Subchapter V Trustee
In a typical Chapter 11 bankruptcy case, the court doesn’t appoint a trustee unless someone has requested it or it has a reason to, such as fraud or dishonesty by a debtor. However, these rules don’t apply in a Subchapter V case. In a subchapter V case, a court automatically appoints a trustee, who plays a crucial part in the case.
A trustee will help you move through the bankruptcy process by:
- Being accountable for the property that’s in bankruptcy – Trustees manage all the assets and property that’s in bankruptcy to make sure it’s handled appropriately. Managing property is one of the most important duties that they have.
- Obtaining any information the case needs – If the trustee has questions about the case or needs further information, they can talk with you and creditors to understand the situation. They’ll investigate any assets or actions that you take that are relevant to your bankruptcy plan.
- Examining claims and business finances – As part of their duties, a trustee in a Subchapter V case will examine your financial situation and any claims against you and create a report about your case.
- Reviewing the plan and confirming it or raising objections – One of the most important functions of a trustee is understanding the plan you propose and then supporting or opposing it. By working with the trustee, you can answer their questions and work towards a plan that the court will approve.
- Acting as an impartial third-party with you and creditors – Since there’s no creditors’ committee in a Subchapter V case, the trustee can handle creditors’ interests and act as a neutral party to help move your bankruptcy forward.
Chapter 11 Subchapter V Eligibility
Before you can file Chapter 11 Subchapter V, you must meet certain requirements. First, your organization must conduct commercial or business activities. You must also choose to proceed under Subchapter V rather than another type of bankruptcy. Finally, you must meet certain debt requirements before a court will allow you to proceed under Subchapter V.
To qualify for the subchapter, your debt must be under set limits. When Subchapter V was originally put into law, there was a limit of $2,725,625 in noncontingent liquidated secured and unsecured debts that a business could hold if they wanted to use this subchapter.
However, due to the COVID pandemic that started in March 2020, the government used the CARES Act to increase the limit to $7,500,000 for one year. If you meet these debt limits, and at least 50 percent of the debts arose from commercial or business activities, then you may qualify for Subchapter V.
If you’re unsure of whether you qualify under this subchapter, a Chapter 11 Subchapter V lawyer can review your situation and help you understand whether you qualify.
How Can a Cleveland Chapter 11 Bankruptcy Lawyer Help?
A bankruptcy is a stressful and confusing time, but a Cleveland Chapter 11 bankruptcy attorney can help you in many different ways.
- Evaluate your case and give you information about your options – Depending on the facts of your situation, an attorney can let you know how to proceed and whether you need to enter bankruptcy to begin with.
- Advise you on which type of bankruptcy may work best for you – Bankruptcy law is complex, and the type of bankruptcy you choose can have enormous impacts on you and your future. An attorney can lay out the advantages of each type and help you make the choice that works for you.
- Let you know what documentation you’ll need for a bankruptcy – A bankruptcy case is built on documents. You’ll need to provide everything that your case requires. An attorney can let you know what you’ll need, when you need it, and how you can make your case go as smoothly as possible.
- Answer any questions you have throughout the process – As a bankruptcy case moves forward, you may have questions about how your case is going and what it needs. An attorney can answer your questions and keep you informed about the status of your case.
- Handle any court filings, forms, and paperwork – Courts require specialized forms and paperwork for a bankruptcy case. An attorney can take care of your petition and any forms that your case needs.
- Advocate for you and your rights at any hearings – As part of the bankruptcy, an attorney can stand up for you and your bankruptcy in any court hearings that your case needs.
From start to finish, an experienced bankruptcy attorney can give you the advice, guidance, and representation that you need. Your lawyer will steer you through the bankruptcy process and will keep you informed at every stage. Whether you’re considering a standard Chapter 11 bankruptcy, or you have questions about proceeding under Subchapter V, make sure to discuss your options with a lawyer right away.
Chapter 11 Bankruptcy Lawyers in Cleveland
If you’re considering filing for Chapter 11 bankruptcy or a Chapter 11 Subchapter V bankruptcy, speak with Amourgis & Associates, Attorneys at Law, today. Don’t wait to get the help you need. Contact us online or call us today for a free case evaluation.