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Bankruptcy for Small Businesses in California

business bankruptcy.jpgChapter 11 bankruptcy is a beneficial reorganization tool for many financially distressed businesses. Filing Bankruptcy can help a business in many ways. You can reorganize your debt, both secured and unsecured. Bankruptcy can give you protection from your creditors while you litigate against businesses or person who have interfered with your business. Bankruptcy can also help you with your debt.

The Bankruptcy Code allows businesses of any size a wide variety of protections while they reorganize their business. There are special provisions for small business and single asset real estate businesses. As well as methods of shortening the process through a pre-packaged bankruptcy plan. Small business, single asset real estate, and pre-packaged bankruptcies are all types od bankruptcy proceedings designed to streamline the process, making it quicker and less burdensome. If your small business needs restructuring in California, you should contact an experienced San Jose business bankruptcy lawyer for immediate legal assistance.

What Makes Small Business Bankruptcy Cases Unique

  • Control: The Chapter 11 process allows the business owner to control the bankruptcy. The Debtor in Possession, i.e. the person the business owner designates to control the bankruptcy, works with Counsel, to come up with a plan to resolve the problem the business needs to solve. This is different than other bankruptcy proceedings, called chapters, because in a Chapter 7 or a Chapter 13, a trustee is appointed. The Chapter 7 or Chapter 13 trustee makes the decision as to what will occur. 
  • Additional flexibility: The Chapter 11 process is very flexible. Depending on what problem you are trying to address, Chapter 11 allows you to address it. If you are concerned about the length of the bankruptcy, you can choose to do a pre-packaged bankruptcy, if the facts allow it. If you need protection from your creditors while you deal with a problem in the business, you might want a longer process, which will allow you the time you need to reorganize and protect your income stream. In general, small businesses cases can get through the reorganization process more quickly, and they are generally held to less strict deadlines. For example, in most Chapter 11 cases, filing businesses have a 120-exclusivity period. However, small businesses are allowed an additional 60 days, meaning they have an 180-day exclusivity period. This period can even be extended for up to 300 days if a small business can show legitimate cause to do so. The longer exclusivity period and increased flexibility are critical because it greatly reduces the risk that a small business will end up facing costly litigation. 

Does Your Small Business Need Legal Assistance?

At Diemer, Whitman & Cardosi, LLP, our dedicated San Jose business bankruptcy team has helped many California small businesses get through periods of financial distress. If you believe that your small business may need bankruptcy assistance, please call our San Jose office today at (408) 971-6270. Our firm represents small and mid-sized businesses throughout the Bay Area, including in Santa Clara County and San Mateo County.

Source:

https://www.law.cornell.edu/rules/frbp/rule_1020

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