Chapter 11

Cerritos Chapter 11 Bankruptcy Lawyer

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When you are facing overwhelming debt, you naturally don’t want to accumulate any further financial burden with your attorney fees. At Anyama Law Firm, we will do our best to help you out of your financial mess at an affordable price. Our leading bankruptcy attorney has saved clients over $30 million throughout her decade-long career, so you can trust that we know how to help you strategize a strong and efficient case to regain your financial footing.


Schedule a free consultation with Anyama Law Firm to discuss your legal options in more detail. Serving clients in Los Angeles, Orange County, and throughout California.


Chapter 11 Bankruptcy

Chapter 11 is a common option for large and small businesses seeking debt relief due to a temporary downturn. Individuals can also seek relief in Chapter 11 especially those individuals who are above the debt-limit for Chapter 13 cases. The goal of Chapter 11 is to create a financial plan that the filer, creditors, and the court agree will enable the business to remain in operation while working on reorganizing its debts. Some examples of terms a plan can include are:

  • modifying interest;
  • payment due dates;
  • entire debt discharges. 

Most plans will also include some level of downsizing of your operations to reduce expenses and free up assets. In some cases, you may be required to liquidate operations and provide for the sale of your remaining property, much like the case of Chapter 7.

The Filing Process

To bring forward a Chapter 11 case, you and your attorney should file a petition in bankruptcy court. Be aware that you must be represented by an attorney in Chapter 11 Business cases. 

While you can continue running the business as a debtor in possession in Chapter 11, the bankruptcy court must approve the following actions:

  • any assets you wouldn't sell in the ordinary course of business (e.g., real property);
  • entering into or breaking a lease;
  • mortgage or other secured financing arrangements that allow you to borrow money;
  • shutting down or expanding business operations;
  • entering into or modifying union, vendor, licensing, and other contracts and agreements; 
  • the retention of, and payment of fees and expenses to, attorneys and other professionals.

Creditors, shareholders, and other interested parties may support or oppose actions that require bankruptcy court approval, and you must fully disclose the appropriate background information so a creditor can make an informed decision about the feasibility of your plan.

Your creditors must accept your plan in order for you to proceed. If they object, the court will consider the following factors to decide whether to confirm your plan:

  • Feasibility. Is the plan feasible or likely to succeed based on your ability to raise sufficient revenues to cover expenses and creditor payments?
  • Good faith. Is the plan proposed in good faith and not based on an ulterior motive forbidden under the law?
  • Best interests of creditors. Will the creditors receive at least as much under the plan as they would if your case were converted to a Chapter 7 liquidation case? 
  • Fair and equitable. The plan also must be "fair and equitable" – secured creditors must be paid over time at least the value of their collateral, and you cannot retain anything on account of your equity interests unless all obligations are paid in full. 

If all necessary creditors approve of the reorganization plan, it will become a new contract, and you will receive the debt discharge immediately. If the court approves the plan without creditor consent, such as in Chapter 11, Subchapter V (below), you must make all required payments before receiving the debt discharge.

Subchapter V

While most businesses are eligible for Chapter 11, not all small business owners can afford the complexity and cost of a conventional Chapter 11 filing. Subchapter V was introduced to Chapter 11 in 2019 to make reorganization bankruptcies a little more accessible to small businesses. To qualify for Subchapter V, you must be pursuing business activities and have debt not exceeding $2.75 million, 50% of which must come from business activities. 

Businesses that file under Subchapter V can force creditors to accept court-approved repayment plans of 3-5 years. They can also use the plan to get rid of some of their unsecured debt for which they have offered no collateral, such as credit card debt. In summary, Subchapter V offers the following benefits, among others:

  • No need for creditor approval. The bankruptcy court can confirm your Subchapter V reorganization plan without the approval of your creditors if it finds it to be fair. 
  • No need for disclosure. No disclosure statement needs to be filed, as opposed to in a standard Chapter 11.
  • Expenses paid in installments. In a traditional Chapter 11 case, you must pay all the administrative expenses on the day the plan becomes effective. With Subchapter V, you can pay the expenses over the length of the plan.

For more information on the Chapter 11 process, whether you are an individual debtor or a large or small business, contact Anyama Law Firm today. We practice exclusively in the area of bankruptcy, and we have over a decade of experience helping clients get out of mounting debts. Get started on your Chapter 11 filing; let’s get you back on solid financial ground today.


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