Chapter 11 Bankruptcy Lawyers - Nick Davis Law

Yes, Chapter 11 is particularly helpful for individuals who own multiple investment properties and are facing financial challenges. Unlike Chapter 13, which has debt limits, Chapter 11 allows you to restructure debts on high-value assets such as real estate portfolios. You can propose a reorganization plan that prioritizes keeping your most profitable properties, renegotiates mortgage terms, and potentially sells off underperforming ones. This flexibility helps high-net-worth individuals manage complex real estate holdings without losing their entire portfolio.

Child support and alimony obligations are considered priority debts and cannot be discharged in Chapter 11 bankruptcy. You must continue making payments on these obligations, and they cannot be reduced through the reorganization process. However, if you have other substantial debts (such as business loans or mortgages), Chapter 11 can help you restructure those obligations, freeing up more resources to meet your child support or alimony commitments. Additionally, the bankruptcy court will expect full disclosure of these obligations when crafting a feasible repayment plan.

Yes, Chapter 11 is often the best option for self-employed individuals or sole proprietors facing overwhelming debt. Unlike Chapter 13, which is focused on wage earners, Chapter 11 allows more flexibility in reorganizing both personal and business debts. If your personal finances are closely tied to your business, Chapter 11 enables you to restructure business obligations, renegotiate contracts, and retain assets critical to your livelihood, all while creating a plan to repay creditors over time. This is crucial for protecting both personal and business interests during financial restructuring.

Most retirement accounts, such as 401(k)s, IRAs, and pension plans, are protected from creditors in Chapter 11 bankruptcy. These funds are generally exempt under federal and state bankruptcy laws, meaning you can keep your retirement savings intact while reorganizing your other debts. However, any withdrawals from these accounts prior to filing could be subject to scrutiny, and the court may limit how you use retirement income to repay creditors. It’s essential to work with your attorney to understand how to best protect your retirement while navigating the Chapter 11 process.

Secured debts, such as mortgages or car loans, can be restructured in Chapter 11, allowing you to renegotiate payment terms, lower interest rates, or extend repayment periods. This flexibility can help you keep high-value assets while adjusting monthly payments to a more manageable level. In some cases, you may also be able to “cram down” certain secured debts, meaning you reduce the loan balance to the current market value of the collateral. This is particularly useful for individuals whose property values have declined since taking on the original loan.

Filing for Chapter 11 bankruptcy will negatively impact your credit score, and the bankruptcy will remain on your credit report for up to 10 years. However, many individuals find that their credit score improves over time as they successfully complete their repayment plan and eliminate large amounts of debt. Additionally, creditors may view Chapter 11 as a sign that you’re taking responsible steps to address financial problems, which can make it easier to rebuild credit after the bankruptcy is finalized. It’s important to work on rebuilding your credit post-bankruptcy by making timely payments and managing new credit responsibly.

Yes, Chapter 11 repayment plans can be modified if your financial circumstances change, whether positively or negatively. If you experience a significant increase in income or receive a windfall, you may need to increase payments to your creditors. Conversely, if you suffer a loss of income or unexpected expenses, you can petition the court to modify your plan to lower payments or extend the repayment period. Working closely with your attorney ensures that any changes to your plan are handled properly and approved by the court.

If you fail to make payments as outlined in your Chapter 11 plan, creditors can petition the court to either enforce the plan or convert the case to Chapter 7, which could result in liquidation of your assets. It’s important to stay on top of your financial obligations and maintain open communication with your attorney if you’re struggling to make payments. In some cases, you may be able to negotiate a modification of the plan to make payments more manageable or seek a temporary suspension if you’re facing short-term financial difficulties.

Certain debts arising from lawsuits or judgments, such as personal injury claims or breach of contract judgments, may be included in your Chapter 11 bankruptcy plan and restructured. However, debts related to fraud, criminal activity, or willful and malicious injury are typically non-dischargeable and must still be paid. If you have significant legal judgments against you, it’s important to disclose these to your attorney so they can be properly addressed in your reorganization plan. In many cases, Chapter 11 can provide relief by allowing you to settle these claims through manageable payments over time.

If you own property jointly with a spouse, family member, or business partner, Chapter 11 bankruptcy can complicate how these assets are treated. Your share of the asset will be included in the bankruptcy estate, but the other owner’s share may be protected. This can impact decisions related to selling or restructuring the asset. It’s essential to carefully assess how jointly-held property fits into your reorganization plan, and you may need to negotiate with co-owners or buy out their share to keep the asset. Your attorney can help you navigate these complex situations to avoid unintended consequences.