Chapter 11 Bankruptcy Attorney in El Dorado, Arkansas

In Arkansas, corporations and partnerships facing financial distress may be able to seek protection under chapter 11 of the United States Bankruptcy Code. Generally, Chapter 11 bankruptcy gives businesses the needed time to reorganize their affairs and operations and settle debts while staying afloat. If your business is overwhelmed with debts and you're thinking about filing for Chapter 11 bankruptcy, you need to consult with a seasoned Arkansas bankruptcy attorney for proper legal direction.  

At Rushing Law Firm, PLLC, we are here to help individuals and businesses in bankruptcy-related matters. Our knowledgeable attorney is available to discuss your options, enlighten you about how Chapter 11 bankruptcy works, and determine your eligibility. Also, we will help file your bankruptcy case and direct you through every legal step involved from start to finish. 

Rushing Law Firm, PLLC, proudly serves clients across El Dorado, Arkansas, and throughout the surrounding areas of Camden, Magnolia, Crossett, Columbia County, Union County, Ouachita County, and Ashley County. 

What Is Chapter 11 Bankruptcy? 

Chapter 11 bankruptcy or "reorganization" bankruptcy is a form of bankruptcy that allows businesses with huge debt burdens to restructure their business operations, assets, debts, and affairs, while the company continues running. 

Furthermore, Chapter 11 bankruptcy is best suited for large businesses, including partnerships and corporations. The business filing for Chapter 11 (the debtor) will propose a reorganization plan to keep the business running and settle its debts over time with future revenue.  

However, filing for Chapter 11 bankruptcy is costly, complicated, and time-consuming. Also, the plan of reorganization must be approved by both the creditor and bankruptcy court. It must also be in the best interests of the creditor. 

Qualifying for Chapter 11 

Additionally, you may qualify for Chapter 11 bankruptcy if:  

• You need enough time to restructure your business affairs, debt obligations, and finances.  

• Your unsecured debt or secured debt is above the limits of a Chapter 13 bankruptcy filing.  

• You do not have any ongoing bankruptcy case within the past six (6) months. 

A practiced Chapter 11 bankruptcy attorney can determine your eligibility and inform you about the processes involved. 

The Process of Filing for Chapter 11  

Here are the steps involved in filing for Chapter 11 bankruptcy in Arkansas: 

File a Petition: Hire a lawyer to help file your Chapter 11 case. Include vital documents and disclosure statement, such as the business's assets, financial statements, contracts, debts, and outstanding leases. 

Automatic Stay: An automatic stay order will go into effect once you file your petition. The order temporarily prohibits creditors from collecting debts or taking any legal action against you or your company. 

Create a Reorganization Plan: Create and file a plan of reorganization within the first 120 days (4 months) after filing your bankruptcy petition. The reorganization plan should outline how you intend to restructure your business operations, limit overhead costs, and ultimately repay your outstanding debts. 

However, the court may extend the deadline to 18 months after the petition date. All revenue generated henceforth will be used to settle your debt obligations. You also have to present the reorganization plan to both the creditor and the court for approval. A confirmation hearing will be scheduled afterward. 

Attend a Hearing: At the confirmation hearing, the court will review the reorganization plan and determine whether to approve it or not. If the proposed reorganization plan is approved and confirmed by the court, it will become effective immediately, and you must start executing it. At the end of your reorganization plan, you will receive a bankruptcy discharge. 

A dependable lawyer can help you outline a strategic plan to reorganize your business and walk you through the legal procedures involved in your Chapter 11 bankruptcy petition. 

What Is a "Debtor in Possession?" 

A "debtor in possession" is the debtor in a Chapter 11 case with no court-appointed trustee to oversee the case. Due to this, the debtor in possession will perform the expected duties and responsibilities of the trustee in the bankruptcy case. Most importantly, the debtor in possession is required to obey all the provisions and instructions of Chapter 11 bankruptcy and all court orders. 

Disclosure Statement 

The disclosure statement can be described as a written document which contains vital information regarding the debtor's finances, assets, debts, business affairs, and liability. The creditor will evaluate the disclosure statement and the reorganization plan to make the right decisions. 

Creditor Committee 

Also, a creditor committee may be established in a Chapter 11 case. The committee will consist of at least three unsecured creditors. The creditor committee members will represent the best interests of all other unsecured creditors and ensure that they receive the amount owed. 

When Is Chapter 11 a Good Option? 

What's more, seeking protection under Chapter 11 of the U.S. Bankruptcy Code may be a good option if: 

• You run a large business, corporation, joint venture, partnership, or LLC. 

• You want to keep your company alive while reorganizing your business operations, debts, finances, and affairs. 

• You have more debt to reorganize than allowable debt limits under Chapter 13. 

A trusted attorney can determine whether Chapter 11 bankruptcy is an ideal option for you. 

Get Legal Guidance from an Experienced Bankruptcy Attorney 

Filing for protection under Chapter 11 bankruptcy often involves a lot of complex procedures. Understanding the process, determining whether you qualify, filing your bankruptcy petition, and creating a plan of reorganization can be difficult and stressful. Therefore, it is vital that you retain a reliable bankruptcy attorney for clear legal guidance and to help you make intelligent decisions. 

At Rushing Law Firm, PLLC, our attorney has devoted their career to directing clients through the complexities of Chapter 11 bankruptcy. As your legal team, we can evaluate the financial situation of your business and determine your eligibility for Chapter 11. Also, our attorney will help file your bankruptcy petition, simplify the whole process, and help you make informed financial decisions going forward.