Chapter 11 Bankruptcy Attorney in Massachusetts
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Is your small business struggling under excessive debt? Don't shy away from bankruptcy as an option for finding a resolution. There are many benefits to bankruptcy that make it a viable option for eliminating your debt. The bankruptcy process was specifically designed by the government to be a legal way for consumers and business owners to discharge debts they cannot afford to repay. Find out if this is the right bankruptcy option for your unique situation!
Chapter 11 bankruptcy is particularly useful for small businesses that wish to continue operations while reorganizing their debt. Unlike other bankruptcy options that may require liquidation, Chapter 11 provides the flexibility needed to restructure your financial obligations. This process can lead to a more sustainable financial model for your business, allowing for future growth and stability.
Why Choose Our Chapter 11 Bankruptcy Attorney?
- Knowledgeable, Proven Guidance Since 2000
- Has Helped Hundreds of Clients Successfully Navigate Debt Relief
- Formerly Named “Lawyer of The Year” by Massachusetts Lawyers Weekly
- Top Rating of Superb on Avvo
The Law Office of Glenn F. Russell, Jr. has helped numerous clients through the bankruptcy process. We can help you understand the different types of bankruptcy for which you may qualify and can guide you step-by-step through the process. We can also help you with bankruptcy exemptions to ensure that you are able to keep as much of your property and belongings as possible.
It is important to work with a legal team that understands both the complexity and the nuances of bankruptcy law. With our guidance, clients have successfully rebounded from financial difficulties, achieving new beginnings and avoiding potential pitfalls that could compromise their future financial health.
Call (888) 400-9318 or use our online form today to schedule your free initial consultation with an experienced Chapter 11 bankruptcy lawyer in Massachusetts.
Understanding Chapter 11 Bankruptcy for Small Businesses
There are several types of bankruptcy under the U.S. Bankruptcy Code. Chapter 7 and Chapter 13 of this code are for consumers, but Chapter 11 is for small business owners. Essentially, filing bankruptcy under Chapter 11 allows you to "reorganize" your debt and keep your business open while your debts are repaid or discharged.
Under this chapter, you – the "debtor in possession" of your business – will sit down with your creditors and work out a repayment plan. This includes determining how long you have to repay your debts before the remainder is discharged. Once your plan has been determined, you must bring it before the bankruptcy court to be entered. You will then continue to operate your business and make payments on your debt (according to the plan) until the repayment term is complete. Your remaining eligible business debts will then be discharged.
This process provides you with valuable breathing space to manage your business operations efficiently, while simultaneously addressing creditor concerns. With the right plan in place, Chapter 11 can be an effective way to protect your business assets, keep employees on payroll, and maintain relationships with suppliers and customers. While navigating the legal system can be daunting, our firm is equipped to offer clear and informed guidance every step of the way.
How Chapter 11 Bankruptcy Works
Massachusetts follows the federal guidelines for Chapter 11 bankruptcy, but there are state-specific considerations that local businesses need to be aware of. One significant aspect is the role of the United States Trustee's Office, which oversees bankruptcy processes in Massachusetts. Understanding their expectations and procedures is crucial for a smooth bankruptcy process. The office evaluates the adequacy of the proposed reorganization plan and ensures that it addresses all aspects of the business's financial situation, maintaining transparency and fairness to creditors.
Another essential factor in Massachusetts is the state's specific exemption laws, which can affect what assets you can protect during bankruptcy. While federal law provides a baseline, Massachusetts residents have the option to choose between federal and state exemptions, depending on which shields more of their assets. This choice can influence the business's ability to retain valuable property and continue operations during and after the bankruptcy process. Navigating these options requires careful analysis and strategic planning to achieve the best outcome for the business.
What Are the Benefits of Chapter 11 Bankruptcy?
Chapter 11 bankruptcy has many benefits when compared to other options. Chapter 7 requires you to sell everything and repay as much of your debt as possible before the rest is discharged.
Chapter 11, by contrast, allows for strategic restructuring, enabling you to retain control over business decisions. This gives business owners the opportunity to implement substantial organizational changes to improve profitability and efficiency. The legal protection offered through Chapter 11 also delays creditors from taking action while the business formulates a practical plan to resolve outstanding debts.
Filing under Chapter 11 has the following benefits:
- Your business remains open
- You do not have to sell your business or inventory
- You have time to reorganize and re-strategize
- You repay some of your debt over time (less damage to your credit)
- Any remaining debt is discharged after your payment plan is up
Building a Strong Bankruptcy Strategy in Massachusetts
Developing a robust Chapter 11 strategy involves a comprehensive approach to financial restructuring. It starts with a detailed assessment of the business's financial health, identifying areas where cost-cutting measures can be implemented without compromising core operations. Engaging with creditors to negotiate favorable terms is also a key component, as maintaining good relationships with them can facilitate more flexible repayment plans.
Another vital aspect is the preparation of a feasible reorganization plan that addresses creditors’ concerns while ensuring the long-term viability of the business. This plan should include projections for future cash flow, potential revenue streams, and strategies for regaining profitability. Incorporating technology to streamline operations and training staff to handle new business models can position the company for a successful turnaround. At The Law Office of Glenn F. Russell, Jr., we assist in every stage, ensuring your strategy aligns with legal frameworks and supports your business objectives. Connect with a qualified Chapter 11 bankruptcy attorney in Massachusetts as soon as possible.
Chapter 11 for Small Businesses: Subchapter V
In recent decades, small businesses have not seen the same number of benefits from Chapter 11 as their corporate counterparts. Chapter 11 has been too expensive and too complex for small business owners, and many of them have been forced to liquidate their businesses through Chapter 7 instead.
To address this issue, Congress passed the Small Business Reorganization Act of 2019, which took effect in February of 2020. The act created Subchapter V within Chapter 11, a subchapter that is exclusively available to small businesses.
Subchapter V offers a streamlined, cost-effective process tailored for small business needs. One major advantage is the debtor’s ability to retain ownership without the absolute necessity of a creditors’ committee, making proceedings less cumbersome. Additionally, the emphasis on quicker and more flexible resolutions allows small businesses to emerge from bankruptcy leaner and more competitive than before.
If you file under Subchapter V, you can experience the following benefits:
- Minimized time and cost of reorganization
- The opportunity to propose the repayment plan yourself
- No need to obtain approval from creditors
- No creditors’ committee or disclosure statements
- Potential mortgage modification of your primary residence
To qualify as a small business, you must have no more than $2,725,625 of debt*, at least 50% of which must have been accrued through business or commercial activities.
A significant change introduced by Subchapter V is the flexibility in proposing your repayment strategy, enabling business owners to tailor plans closely aligned with their operational capabilities. Instead of navigating a convoluted bankruptcy process, Subchapter V promotes a transparent and efficient procedure aimed at business sustainability.
Don’t wait to address your legal needs—connect with a skilled Chapter 11 bankruptcy attorney in Massachusetts at The Law Office of Glenn F. Russell, Jr.. Call (888) 400-9318 or get in touch with us to book your consultation.
Frequently Asked Questions About Chapter 11 Bankruptcy
How Does Chapter 11 Bankruptcy Affect Creditors?
A Chapter 11 filing in Massachusetts halts collection actions via the automatic stay but allows creditors to engage in the debtor’s reorganization plan. Creditors must evaluate this plan to understand repayment terms and ensure their claims are fairly addressed. Legal representation is vital to protect creditor interests and achieve a balance between the debtor’s business viability and meeting creditor obligations.
What Are the Key Differences Between Chapter 11 & Other Bankruptcies?
Chapter 11 focuses on reorganization, enabling businesses to restructure debts while staying operational. Unlike Chapter 7's liquidation or Chapter 13 for individuals, Chapter 11 allows extended repayment timelines and modification of certain contracts. This flexibility helps businesses retain their workforce, fulfill commitments, and adapt to dynamic industries, paving the way for potential growth and stability.
How Long Does the Chapter 11 Process Take in Massachusetts?
The duration of a Chapter 11 bankruptcy process in Massachusetts can vary significantly based on the complexity of the business's financial situation and the negotiation process with creditors. Generally, it can take several months for a reorganization plan to be developed, proposed, and confirmed by the bankruptcy court. Some Chapter 11 proceedings might resolve within a year, while others could extend beyond two years depending on various economic and legal factors.
Working with accomplished legal professionals can expedite the process by ensuring detailed preparation and proactive management of potential challenges. At The Law Office of Glenn F. Russell, Jr., we commit to making this complex process as efficient and smooth as possible, leveraging our understanding of Massachusetts bankruptcy laws to support a favorable resolution.
Is Chapter 11 the Right Choice for My Massachusetts Business?
Determining whether Chapter 11 is the appropriate course of action requires a thorough analysis of your business’s financial health, future prospects, and alternative options. Factors to consider include the nature of your debts, your business's operational capacity post-filing, and long-term business goals. Businesses that demonstrate potential for profitability post-reorganization may find Chapter 11 an ideal route, whereas those without a viable path forward might explore other bankruptcy options.
Consulting with a bankruptcy attorney at The Law Office of Glenn F. Russell, Jr. is essential in making an informed decision. Our tailored advice considers the complexities of Massachusetts bankruptcy regulations and your unique business circumstances to offer the most suitable recommendations for your financial recovery.
Speak with a Massachusetts Chapter 11 Bankruptcy Attorney Today
The Law Office of Glenn F. Russell, Jr. is here to help. No matter what your financial situation is, our compassionate and knowledgeable team will help you understand your options and will guide you toward a future without debt.
Choosing to file for bankruptcy is a significant decision that involves careful consideration and planning. As we delve into your financial landscape, we will offer unparalleled support and detailed explanations, ensuring that you make informed choices every step of the way. Our commitment is to stand by your side from the initial consultation to the conclusion of your bankruptcy process, providing unwavering support and substantial legal counsel.
Contact us today at 888.400.9318 for an initial consultation!
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Our FAQ
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Do I really need a foreclosure lawyer?Absolutely. Should you need foreclosure defense counsel, only an experienced attorney can determine which course of action is best for you. Whereas predatory scam artists try to prey on your financial vulnerability, a skilled foreclosure defense attorney genuinely can look out for the best interest of you and your family. Legal advice must be practical and efficient in order to be effective, so if you need strong legal guidance, trust that The Law Office of Glenn F. Russell, Jr. can offer the counsel needed to successfully navigate the complicated legalities of foreclosure or bankruptcy.
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Third parties are offering to help my foreclosure process. How do I know who to trust?
Perhaps one of the greatest obstacles individuals encounter during the foreclosure process is learning who to trust and who to avoid. Due to the nature of the foreclosure process, descriptions of any homes being foreclosed may be published and accessible as public information. It is a sad truth that there are fraudulent companies that prey on public lists of foreclosing homes and attempt to take advantage of a people's financial vulnerability.
You may be contacted by mortgage brokers, mortgage negotiators, or mortgage holders. You may also be contacted by a Massachusetts bankruptcy attorney or a private financier who offers to help you sort out your finances. These parties may be dependable sources of legal and helpful advice during your foreclosure.
Unfortunately, there are frauds and scam artists who will try to take your home or your money without providing any sort of service. A general word of advice we give to clients to follow is: If a deal sounds too good to be true, it probably is. Avoid scams with the help of a qualified attorney from our firm!
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What happens at a foreclosure sale?
It doesn't happen all the time, but if you have exhausted all of your legal alternatives and feel as though a foreclosure or short sale is the last resort, you need to know what to expect.
No foreclosure sale is exactly the same, but for the most part, the foreclosure sale process typically involves the following:
- Lenders must first send a notice of a foreclosure to the homeowner. The notice must be sent at least 14 days prior to the foreclosure sale date.
- A foreclosure sale will take place at the date, time, and place specified in the foreclosure notice.
- The foreclosure sale will be conducted by a licensed auctioneer. The auctioneer will read various legal notices, descriptions, and documents pertaining to the property.
- The auctioneer will take bids on the property, take deposit checks, and accept the highest bid to close the foreclosure property sale.
- Parties - including the mortgagor, the purchaser, and the auctioneer - will draft a foreclosure deed, which must be recorded and filed at the Registry of Deeds.
- A grace period - typically 30 days - will be given to allow the purchaser to line up financing.
- A closing will take place, and the new owner will formally take title to the foreclosed property.
All monies paid by the new purchaser will go toward paying real estate taxes, owed mortgages, and payments to creditors or other debts owed on the property. If no one at the foreclosure sale is able to bid a high enough amount to cover the debt of the property, then the balanced owed - called a deficiency - would then be the liability of the old owner.