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Chapter 11 Bankruptcy for Individuals, Small Business Owners, Landlords and Property Owners

Chapter 11 for Small Business Owners

Chapter 11 bankruptcy is the only option for small businesses to stay in business and continue operations. For a small business (i.e., partnership, limited liability company, corporation) seeking to reorganize and restructure debt, Chapter 11 is the answer.

The Bankruptcy Code provides for special provisions allowing a “small business debtor” to “fast track” through the Chapter 11 process, reducing restructuring and legal costs. A “small business debtor” is a person or entity who: (1) engaged in business or other commercial activities; and (2) owes no more than $2,490,925 in total claims (excluding insiders and family members of the owners).

Rounds & Sutter LLP combines business experience and legal expertise to help small businesses navigate their Creditors concerns and Court procedures.

Chapter 11 for Individuals

There are also many reasons and advantages for an individual to file a Chapter 11 bankruptcy case. Individuals who exceed $1,081,400 for secured debts andor $360,475 for unsecured debts have Chapter 11 as an option. Additionally, individuals above the income limit for their household that are not eligible to file under Chapter 7 may find that a Chapter 11 bankruptcy is a better option than filing under Chapter 13. Significant savings will be realized by proposing a plan that pays less disposable income to unsecured creditors.

Advantages of Chapter 11 Bankruptcy

  • No debt limit
  • Modification of secured debt payments (rental & commercial mortgages)
  • Strip wholly unsecured junior liens (“underwater” notes)
  • Bifurcate partially secured debts and discharge the unsecured debt amount
  • Retain your assets (non-exempt assets otherwise subject to Chapter 7 Liquidation)
  • Control and direct Chapter 11 reorganization as debtor in possession
  • Negotiate terms of the plan of reorganization with creditors
  • Discharge unsecured debts

Chapter 11 for Landlords and Property Owners

Commercial or rental landlords can benefit greatly from a Chapter 11 bankruptcy. Chapter 11 allows property owners to modify their mortgage notes by reducing interest rates, extending the term of the note (including extensions of balloon notes), stripping off the unsecured debt portion of the mortgage note, lower monthly payments, lower the mortgage principal balance, and strip off unsecured junior liens. The attorneys at Rounds & Sutter, LLP can help you realize substantial savings and increased rental cash flow for your properties.

Please contact us and ask how we can help you realize substantial savings on your commercial property or rental property through a Chapter 11 bankruptcy. Ask about confirmed Chapter 11 successes to see how your situation may have similar results. (i.e., mortgages reduced to zero percent (0%) interest rate, balloon notes extended at zero (0%) interest rate, note principal balance reduced to fair market value)

Keep Your Property, Reorganize Your Finances

At Rounds & Sutter, our bankruptcy attorneys know the pros and cons of the different bankruptcy chapters. We take the time to understand your unique situation and advise you on the best option to meet your particular goals. To determine if we can help you with a Chapter 11 bankruptcy or other form of debt relief, contact Rounds & Sutter to speak with an experienced California bankruptcy lawyer at our offices in Santa Barbara, Ventura, Westlake Village, and San Clemente.

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