You often hear Chapter 11 bankruptcy in connection with large corporations such as United Airlines or General Motors. This does not mean that Chapter 11 filings are limited to huge, multi-million dollars companies, however. Chapter 11 bankruptcy can help businesses of any size, and often helps prevent small business owners from having to close their doors. If you are a business owner and are struggling to pay your debts or suppliers, consider discussing Chapter 11 bankruptcy with an experienced attorney today.
Are you a business owner?
Only businesses can file for Chapter 11 bankruptcy under the United States Bankruptcy Code. Though companies of all sizes may file under Chapter 11, there are special circumstances for small business owners. If the total of all of your claims is less than $2,490,925, you are considered to be a “small business debtor.” The small business debtor label allows you to skip certain restructuring steps and complete the Chapter 11 process in a shorter period of time.
Do you operate as a partnership, corporation, or limited liability company (LLC)?
Business owners have the option of choosing between Chapter 11 and Chapter 13 bankruptcy. However, only individuals are allowed to file for Chapter 13 bankruptcy. This means that if you operate as a certain type of business entity, such as corporation, LLC, or partnership, you are not eligible for Chapter 13 and Chapter 11 will be the best option for you.
How much debt do you owe?
Even if you are an individual business owner, you still may not be eligible for Chapter 13 bankruptcy. Chapter 13 has a cap on the amount of debt your business may have, and these limits are as follows:
- $1,149,525 in secured debts
- $383,175 in unsecured debts
If you owe more than these amounts in either secured or unsecured debts, Chapter 11 bankruptcy will be you business’s best option.
Contact an Arizona Chapter 11 Bankruptcy Lawyer for a free consultation
If your business is struggling, an experienced Arizona bankruptcy attorney can advise you whether Chapter 11 filing is the right solution for you. Do not hesitate to contact one of our lawyers at the Ellett Law Offices to start solving your business’s financial problems. We offer free consultations, so call today at (602) 235-9510 for help.