Chapter 11 Bankruptcy Attorney In Chicago, Illinois

individuals As well can file for Chapter 11 bankruptcy in Chicago.

Contact Benjamin Legal Services to schedule a consultation with a lawyer today. 312-945-0021

Benefits of filing an individual Chapter 11.

Re-work your loan payments and extend them for the life of the loan rather than doing a modification which is temporary and limited to 5 years. Loan workout and restructuring in Chapter 11 is permanent, not like the "loan modifications" that lenders claim are permanent but not.

Here are the potential benefits:

Debt Restructuring: Chapter 11 allows for the restructuring of debts, providing the opportunity to negotiate new terms with creditors. This may include reducing the total amount owed, lowering interest rates, or extending the repayment period.
Cramdown Mortgage Payments: In Chapter 11 you can restructure mortgages on non-residential property to reduce the amount owed to the value of the real estate and change the interest rate and terms. You can extend repayment of arrears up to life of the loan, not limited to 60 months like Chapter 13.

Asset Protection: Individuals filing for Chapter 11 may have substantial assets that they want to retain. The reorganization process can help in protecting these assets while creating a plan to repay creditors.

Operational Control: Unlike Chapter 13, which involves a court-approved repayment plan, Chapter 11 allows the debtor to retain control over their assets and operations. This can be beneficial for individuals with complex financial affairs.

Avoiding Liquidation: Chapter 11 focuses on reorganization rather than liquidation. This means the debtor can work towards a plan that allows them to keep their assets while satisfying creditors.

Business Reorganization: If the individual owns a business, Chapter 11 can be used to reorganize business debts, potentially allowing the business to continue operating and generating income.

Flexibility in Repayment Plan: Chapter 11 allows for greater flexibility in developing a repayment plan. The debtor has more control in proposing terms that work within their financial capacity.

Higher Debt Thresholds: Chapter 11 is often chosen when the individual's debts exceed the limits for Chapter 13. There are no debt limits in Chapter 11, providing an option for those with substantial debt.

Extended Timeframe: The timeline for Chapter 11 can be longer than Chapter 13, providing additional time for the debtor to address complex financial issues.

While there are benefits, filing for Chapter 11 is a complex and expensive process. It involves extensive paperwork, court appearances, and negotiations with creditors. Legal and financial advice is crucial in these cases to ensure the individual's goals are achieved and the plan is feasible. It's advisable to consult with an experienced bankruptcy attorney to assess the specific circumstances and determine the best course of action.

Advantages of Chapter 11 vs. Chapter 13.

Chapter 11 and Chapter 13 bankruptcies are both reorganization chapters under the U.S. Bankruptcy Code, but they cater to different entities and situations. Here are some potential advantages of Chapter 11 over Chapter 13:

Business or Individual Reorganization

Funding: Plan can be funded exclusively through the sale of assets or other sources

Payments: No requirement for periodic payments

Income: No requirement that the Debtor have regular income.

Loan Modifications: Mortgage Strip-down can modify non-primary residences over more than 5 years

Duration: A Chapter 11 Plan is not limited to 5 years.

Start Date: Plan payments do not typically start until 30 days after Plan confirmation in Chapter 11. In Chapter 13 they start 30 days after the Chapter 13 is filed.

Debt Amount:

• Chapter 11: There are no specific debt limits in Chapter 11, making it suitable for businesses or individuals with very high levels of debt.
• Chapter 13: Individuals with debts exceeding the Chapter 13 limits may turn to Chapter 11 for reorganization.

Flexible Repayment Terms:

• Chapter 11: Debtors in Chapter 11 have more flexibility in negotiating the terms of their repayment plan, making it suitable for complex financial situations.
• Chapter 13: The repayment plan in Chapter 13 is more standardized and typically spans three to five years.

Complex Financial Situations:

• Chapter 11: Suited for complex financial restructurings, including large corporations or individuals with intricate financial affairs.
• Chapter 13: Geared towards individuals with a regular income who may not have as complex financial situations as businesses.

Creditor Involvement:

• Chapter 11: Creditors have more active involvement and voting rights in the approval of the reorganization plan.
• Chapter 13: The debtor proposes the plan, and while creditors can object, they don't have the same level of involvement as in Chapter 11.

Plan Confirmation:

• Chapter 11: The debtor has a more active role in formulating and proposing the reorganization plan.
• Chapter 13: Debtors propose a plan, and if it meets legal requirements and is feasible, it is usually confirmed.

Timeline:

• Chapter 11: The timeline for Chapter 11 cases can be more extended than Chapter 13, providing additional time for complex reorganizations.
• Chapter 13: Typically has a shorter duration, lasting three to five years.

It's important to note that Chapter 11 is generally more complex, time-consuming, and expensive compared to Chapter 13. The choice between Chapter 11 and Chapter 13 depends on the specific circumstances of the debtor or business, and consultation with legal and financial professionals is crucial for making informed decisions.