Houston How Chapter 11 Works Attorneys
Businesses and corporations are susceptible to periods of financial distress just as individuals are, and at times debts can exceed holdings and revenue to a degree that it becomes impossible to provide payments to creditors. In such situations businesses have few options with which to settle their debts outside of liquidation, but one possibility is to restructure a company through a Chapter 11 bankruptcy filing in an effort to settle debts while remaining in business.
If your business has reached a point where you can no longer pay the debts you owe, it may be time to consider filing for bankruptcy protection. The experienced Houston Chapter 11 bankruptcy attorneys at the Russell Van Beustring P.C., are prepared to help you to restructure your business. Contact us at 713-973-6650 to learn more about your legal options.
The Chapter 11 Process
Business bankruptcies can take one of two forms: Chapter 7, in which the business ceases operations and liquidates its holdings, or Chapter 11, in which the business is restructured but remains in operation. The Chapter 11 process usually takes the following steps to resolve critical debt:
- Automatic stay against collections. When a Chapter 11 petition is filed, the court immediately grants a stay that prevents creditors from making any further attempt to collect debts.
- Reorganization plan. The business is granted the status of “debtors in possession” and attempts to create a suitable plan to repay their creditors.
- Confirmation. If all creditors agree to the reorganization plan, the judge will confirm it and the agreement will become binding. Even with a minority dissent, a plan can still be confirmed, so long as it does not discriminate against a particular class of creditors.
- Restructuring takes effect. Once a reorganization plan has been approved, the business will move forward under the oversight and jurisdiction of the court.
In cases where the businesses debts exceed its assets, the restructuring will include the rights and interests of the company being transferred away from the owners and to the creditors.
If your company or corporation is too loaded with debt to keep pace with its obligations, the bankruptcy lawyers at the Law Office of Russel Van Beustring, P.C., can help you reach a reasonable settlement with your creditors which will allow you to remain in operation while working to resolve your debt problems. Contact us by calling 713-973-6650 today.