Small businesses that are in financial distress have three potential bankruptcy options. These are Chapter 7, Chapter 11, and Chapter 13.  Individuals typically file Chapter 7 or Chapter 13 rather than Chapter 11, because these are simpler and less expensive.  A chapter 11 bankruptcy is a form of bankruptcy restructuring, available to individuals, businesses, and partnerships.

It does not specify limits on the quantum of debts, as Chapter 13 does.  Chapter 11 is the common choice of large corporations seeking to restructure their debt.  A chapter 11 bankruptcy attorney in MD helps businesses to choose the most viable option to reorganize their debtschapter 11 bankruptcy attorney in MD

 A debtor in Chapter 11 usually remains in ownership of the assets, and carries out the business under the supervision of court and for the benefit of creditors.  A Chapter 11 plan is confirmed only if 13 requirements are met, however of these 13, only 6 are considered daunting.  But importantly, a Chapter 11 plan can be confirmed only if it has been accepted by every impaired class of creditor.

 Small businesses and major corporations follow the same rules to reorganize under Chapter 11. However, Chapter 11 has special provisions that allow businesses to fast-track through the entre restructuring process and minimize legal expenses.  Some of the special procedures allowed for businesses under Chapter 11 include, No Creditor Committee, Plan deadline, longer exclusive period to propose plan, and Additional U.S. Trustee oversight.  Due to the complexity of the procedures, small businesses seek assistance of chapter 11 bankruptcy attorney in MD. bankruptcy attorney in MD

 Companies under financial distress that want to stay in business have two restructuring options under bankruptcy law: Chapter 11 and Chapter 13.  Chapter 11 and Chapter 13 are somewhat similar, as both types of bankruptcy allow debtors to continue in business and offer plans to reorganize.  Both Chapter 11 and Chapter 13 (subject to rules) allows businesses to retain property, gives time to sell assets, modify payment terms on secured debts, and eliminate obligations on plan terms.

 Most businesses that are in financial distress choose Chapter 13 over Chapter 11, because even though the latter is more flexible, it is expensive and takes too much time to be a feasible option for small entrepreneurs.  Chapter 13 bankruptcy lawyer in Maryland can assist debtors in understanding more about Chapter 11 and Chapter 13 intricacies.

 Virtually any debtor can file for Chapter 11. On the other hand, most small businesses are ineligible to file for Chapter 13.  Chapter 13 is available to persons with steady income. If an individual operates business as a sole proprietorship, they can avail of Chapter 13 by filing a petition on their own behalf.  It must however be understood that small businesses if operated via partnerships, corporations or otherwise may not be eligible to seek restructuring through Chapter 13.

 In Chapter 11, appointment of a trustee is an exception rather than a rule; on the other hand in Chapter 13 appointment of a trustee is a must.  There are various pros and cons of both Chapter 11 and Chapter 13 proceedings. Debtors must also understand that more categories of debts are dischargeable in Chapter 13 than in Chapter 11. Chapter 11 bankruptcy attorney in MD can help debtors understand the intricacies better.  Since the primary reason for filing bankruptcy is to discharge obligations to debtors and restructure business, it is prudent that debtors seek help of an experienced bankruptcy attorney.