Chapter 11 Bankruptcy

Houston bankruptcy attorney Vicky Fealy has, for more than 18 years, provided experienced and skilled representation for Houston businesses regarding bankruptcy law issues such as Chapter 11 bankruptcy, business restructuring and debt restructuring.

Chapter 11 is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.

A debtor who is filing for Chapter 11 must submit a list of assets and liabilities and a detailed list of his financial affairs. The specifics of this filing vary from state to state

THE TEXAS DIFFERENCE

In Texas, a petition to file Chapter 11 bankruptcy begins with a voluntary petition form which includes the individual or business name, place of operation, lo cation of principal assets, the debtor's plan and a request for relief. By filing Chapter 11, the business automatically becomes a debto r in possession, which means it controls the assets but still owes money. A judge will decide whether to appoint a trustee. Generally, trustees are not appointed in Chapter 11 cases.

Filing a petition stops all listed creditors from trying to collect money a debtor owes them. The court notifies creditors of the filing. A stay of collections becomes effective at the time of the filing, even though the creditors will not be notified until afterward. After the creditors have been notified, they must cease all lawsuits, garnishment actions and telephone calls against the debtor. Sometimes when a debtor has property that is owned by a creditor, and it does not pertain to the reorganization, the creditor may have access to the property.

A written statement, incl uding a plan for reorganization, must file with the court. For 120 days after the filing, the debtor has exclusive rights to the plan. Because Chapter 11 cases can drag on for years, a creditor has a right to file its own plan for the reorganization of a company. This plan must list outstanding claims and detail how each of these claims will be treated. The claim must also show how the company would earn more money if it were allowed to keep its assets than if its assets were liquidated. In order for it to be approved by creditors, each class of creditors must approve the plan with majority vote. If plan is not approved, the company must be liquidated.

Here is the list of counties we serve: Harris, Fort Bend, Brazoria, Montgomery, Chambers, Galveston, Matagorda, Colorado, Wharton, Fayette, Austin, Waller, Brazoria, Grimes, Madison, Walker and San Jacinto.

If you or your business in Texas needs the assistance of an experienced Houston Bankruptcy Attorney, call The Fealy Law Firm, P.C. today at 866-751-1087, or complete the contact form provided on this site to schedule your free consultation

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