Chapter 11 in Detroit-area - Businesses can get protection
A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a reorganization bankruptcy. Chapter 11 bankruptcy is where a business, such as a corporation, sole proprietorship, or partnership receives protection under federal bankruptcy laws. In a few cases, an individual may file for Chapter 11 in Detroit and the Tri-County area, but for an individual to file under Chapter 11 is rare, and usually only applies to individuals with high net worth.
Chapter 11 allows qualified businesses to reorganize and repay their debts over time. A business must file a Chapter 11 if it has debts that total more than $336,900.00 in unsecured debt and $1,001,650.00. In certain cases owing just slightly in excess of the Chapter 13 debt limits may force the person to file a Chapter 11 bankruptcy.
Although each situation is different, some of the most common issues leading to someone filing for Chapter 11 bankruptcy include:
- Divorce
- Lawsuits
- Medical illness
- Loss of income
- Failure in business
- Loss of professional license
- Commercial or residential foreclosure
- Loss of contract
- Tax problems
Most individuals who file a Chapter 11 are professionals or people with a high net worth who make an above average income or have previously made a significant amount of income. Personal Chapter 11 bankruptcy in Detroit and throughout Michigan is filed because the people filing experience a setback or downturn in their income. In turn, they need breathing room to reorganize their finances and get their finances back on track.
A Chapter 11 bankruptcy, whether it is for an individual or a business, is the most complex and time-consuming of all types of bankruptcy proceedings. Even though Chapter 11 filings make up less than 5 percent of all bankruptcy cases filed, it is estimated that as much as 90 percent of all time expended by the bankruptcy courts involve Chapter 11 bankruptcy proceedings.
Detroit Chapter 11 Business Bankruptcy
Since a business generally exists separate from its owners (except in the case of a sole proprietorship), filing for bankruptcy does not put the personal assets of the stockholders at risk other than the value of their investment in the company's stock. In the case of a sole proprietorship, the owner is considered the debtor, so the bankruptcy filing affects both the business and the personal assets of the owner-debtor. Like a corporation, a partnership exists separate and apart from its partners. In a partnership bankruptcy case (partnership as debtor), however, the partners' personal assets may, in some cases, be used to pay creditors in the Detroit bankruptcy case or the partners, themselves, may be forced to file for bankruptcy protection.
When Chapter 11 bankruptcy is the right choice
Bankruptcy attorney, Victor P. Valentino and his experienced legal staff provide thorough, effective legal assistance with civil litigation, workers compensation, bankruptcy, personal injury and insurance law to residents of the Detroit Tri-County area. With offices located in Bloomfield Hills, he is well-positioned to assist clients in Wayne, Oakland, Macomb and Genesee Counties, including the Bloomfield, Pontiac, Waterford, Clarkston and White Lake areas.
Our office staff helps you fill out all of the paperwork and assists you with obtaining the documents needed for filing bankruptcy. We charge a low flat fee for our complete bankruptcy services—and only $300 to initiate the bankruptcy process..
To arrange your free consultation with a Southeastern Michigan Chapter 7 or Chapter 13 bankruptcy lawyer, contact the Valentino Law Firm in Metro Detroit at 248-334-5340.
