Chapter 11 Bankruptcy Lawyer Serving Youngstown, OH

Youngstown small business owner considers filiing for Chapter 11 subchapter V bankruptcy

If you have a small or mid-sized business struggling with debts in Youngstown, you may be wondering what your options are to reduce this burden and put your business in a more stable financial situation. You likely want to avoid having to sell off all of your assets, but you’re tired of fending off creditors. If you can’t pay off your debts and you don’t have the means to obtain additional credit, what can you do? You’re not alone, and a chapter 11 bankruptcy attorney could help.

One powerful option to wipe the slate clean is to file for bankruptcy. Bankruptcy is a commonly used legal tool to help both businesses and individuals get relief from their debts. There are several ways to file for bankruptcy. With help from a Youngstown bankruptcy lawyer, you can find the way that’s best for your situation.

For many small businesses, filing for Chapter 11 bankruptcy can provide a firmer financial footing and a fresh start.

The Youngstown Chapter 11 bankruptcy lawyers at Amourgis & Associates, Attorneys at Law, have extensive experience helping businesses navigate the bankruptcy process. Our firm is well-known in Youngstown and throughout Ohio for our track record of results and for our commitment to putting our clients first. We are conveniently located nearby in Canfield, OH for your free initial consultation. Among the honors we’ve received for our work, we have an A+ rating from the Better Business Bureau.

Our Youngstown Chapter 11 bankruptcy lawyers are standing by to start your case and lead your business back to financial health. Call us today or visit our contact page to get your free initial consultation.

What Is Subchapter V of Chapter 11 Bankruptcy?

There are several different ways that a person or business can file for bankruptcy in Youngstown. The different ways to file get their names from the different sections of the U.S. Bankruptcy Code where they are found. Individuals generally file for either Chapter 7 or Chapter 13 bankruptcy, depending on the facts of their particular situation.

The section of the Bankruptcy Code used by many businesses is known as Chapter 11 bankruptcy. Filing for Chapter 11 is sometimes known as a “reorganization” bankruptcy because, while some of the assets may be sold to pay back creditors, the goal is to keep the business open by reducing its debt burden. This is in contrast to a “liquidation” bankruptcy, in which assets are sold, and the business is closed.

Filing for Chapter 11 bankruptcy temporarily blocks creditors from taking action against you while you come up with a plan to pay them back. This may involve selling some assets or reducing the business’ operations. You can also work with your creditors to ease your debts by lowering interest rates, extending the timeframe of loans, reducing the principal on loans, etc.

In most Chapter 11 bankruptcy cases, you will maintain day-to-day control of your business while your case moves through the court system, though the bankruptcy court will need to approve certain actions.

There’s a relatively new component of filing for Chapter 11 bankruptcy that can be very useful for small businesses. The Small Business Reorganization Act of 2019, which went into effect in February 2020, added a new Subchapter to Chapter 11 of the federal Bankruptcy Code. This Subchapter is known as Chapter 11, Subchapter V. You are eligible to file for Chapter 11, Subchapter V bankruptcy if your business has $2,725,625 or less in debt.

Chapter 11, Subchapter V makes the bankruptcy process easier and more streamlined for smaller businesses, provided they qualify. Unlike in a traditional Chapter 11 bankruptcy, you do not have to file a disclosure statement under Subchapter V. Instead, you file a brief statement of your assets and income, along with your tax returns and other financial information.

There is also no creditors’ committee in a Subchapter V filing, unlike in a standard Chapter 11 filing. This makes it easier to get your reorganization plan approved and cuts down on the time involved to complete the bankruptcy process. Another feature of Subchapter V that makes it faster is the 90-day filing deadline. The tighter deadline may sound like a disadvantage, but it actually shortens the length of your bankruptcy case overall, which can save you a great deal of money.

What Are the Advantages to Filing for Chapter 11 Bankruptcy in Youngstown?

There are a number of reasons to consider filing for Chapter 11 bankruptcy if your Youngstown business is struggling.

Under Chapter 11 bankruptcy protection, you will:

Stop getting harassed by your creditors – When you file for Chapter 11 bankruptcy, you will get what’s known as an “automatic stay” from the bankruptcy court. This is a court order that blocks creditors from contacting you until you get further along in the bankruptcy process. The automatic stay also prevents creditors from taking any legal action against you, such as repossessing your assets or foreclosing on your home.
Get short-term and long-term debt relief – In the short term, filing for bankruptcy gives you a chance to work with your creditors to reduce your debt burden. This can involve reducing the principal on your loans, lowering your interest rate, or extending the timeframe on loans. In the long-term, the bankruptcy court will discharge many debts once you complete the terms of the reorganization plan, provided the plan is approved.
Maintain control of your business – In many Chapter 11 cases, the bankruptcy court will not appoint a trustee. Instead, you’ll make your payments directly to your creditors while maintaining control of most business operations. In a Chapter 11, Subchapter V bankruptcy case, there is some oversight from a trustee, but their powers are fairly limited. In either case, you are still in the driver’s seat of your bankruptcy case.
Keep your business open – For many struggling businesses, the alternative to filing for Chapter 11 bankruptcy is closure and liquidation. Closing your business not only hurts you, it hurts your employees, your vendors, and others. Filing for Chapter 11 bankruptcy is a way to regain stability and move forward in a more profitable manner.

Subchapter V Trustee in Youngstown, OH

In most Chapter 11, Subchapter V bankruptcy cases, the bankruptcy court will appoint a trustee to oversee the case. When you file a reorganization and repayment plan with the court, you will make your payments to the trustee, who will then distribute the funds to your creditors.

A trustee in Chapter 11, Subchapter V bankruptcy case has a few other duties as well. These include:

Approving the reorganization and repayment plan
Appearing at any court hearings with the filer
Questioning the filer under oath during any meetings with creditors
Watching out for any signs of fraud on the part of the filer
Resolving any disputes between the filer and their creditor

Because the trustee has so much influence in a Chapter 11, Subchapter V bankruptcy case, it’s important to be careful and truthful in your interactions with them. A bankruptcy attorney can help in this regard to make sure you don’t run into any trouble during the course of your bankruptcy filing.

Chapter 11, Subchapter V Eligibility

To qualify for Chapter 11, Subchapter V bankruptcy, your business must meet certain requirements. These are:

You have $2,725,625 or less in debts
Your business is not a single asset real estate operation
At least half of your debts come from business activity

If you do not meet these eligibility requirements, you will have to file bankruptcy under the standard Chapter 11 procedures or through another chapter of the bankruptcy code, such as Chapter 7 or Chapter 13. A bankruptcy attorney can give you more information on whether you qualify for Chapter 11, Subchapter V.

How Can a Chapter 11 Bankruptcy Lawyer in Youngstown Help?

While you do not technically need a lawyer to file for Chapter 11 bankruptcy, it’s always a good idea to speak to a lawyer before you file. The process is extremely complicated, and the longer it takes, the more expensive it can be.

Here are a few ways our Youngstown Chapter 11 bankruptcy attorneys can help. We can:

Examine alternatives to bankruptcy – While bankruptcy is often better than going out of business, it does have certain consequences. A bankruptcy lawyer can look over your finances and see if there may be a better alternative to bankruptcy, such as trying to get existing loans modified by lenders.
Help you file your documents – While a Subchapter V filing is less complicated than a traditional Chapter 11 bankruptcy, there is a lot of paperwork to take care of when you file. It’s important that these documents are filed correctly. Otherwise, you could be accused of fraud, or the process could be dragged out, making it more expensive for you.
Assist with your reorganization plan – There are certain parameters that have to be met in a bankruptcy reorganization plan for it to be approved by the trustee (in a Subchapter V case) or creditors and the court (in a standard Chapter 11 case). It’s in your interest to file this plan as quickly as possible. A lawyer can help you do that while making sure the plan meets the necessary requirements.
Represent you in court and in meetings with your creditors – It’s important to have someone on your side in any bankruptcy hearings, especially meetings with creditors. A bankruptcy lawyer will make sure you’re treated fairly in these hearings and that your rights are upheld.

If you’re considering filing for Chapter 11 bankruptcy, you should speak to a Youngstown bankruptcy attorney as soon as possible. Call Amourgis & Associates, Attorneys at Law, today or visit our contact page for a free case review.