Connecticut Chapter 11 Bankruptcy

Often referred to as business reorganization, Connecticut Chapter 11 bankruptcy is available to both businesses and individuals. Many individuals can use Chapter 13 to reorganize, but some individuals have too much debt or their affairs are complex and an individual Chapter 11 case is required.

Chapter 11 is popular with businesses because it allows them to pay back their debts over time and reorganize their priorities while avoiding liquidation and continuing to operate, and preserving their going-concern value.

Terms of Connecticut Chapter 11

Similarly to Chapter 7, a Chapter 11 bankruptcy begins with the filing of a petition. After the filing, the creditors may not attempt to collect payments.

Following the petition, the debtor must submit schedules and statements that describe various financial components of the business, such as outstanding debts, current revenue, and costs. Shortly thereafter, the debtor proposes a debt reorganization and payment plan to the Court and the creditors. Often bankruptcy litigation will be involved.

Creditors will usually accept a payment plan if they are convinced they will receive more money under the plan than if they liquidated the debtor’s assets.

Chapter 11 advantages

Chapter 11 in Connecticut might be a beneficial financial decision for you or your company if you are facing any of the following problems:

Lawsuits resulting from debt
Excessive debts
Economic hardship resulting from slow business

Chapter 11 bankruptcy in Connecticut provides a good deal of protection for the debtor. Advantages of Chapter 11 include the following:

The business in debt remains intact throughout Chapter 11
There are no initial requirements regarding the size of your debt
Leases and contracts can be avoided and lease and contract debt can be forgiven.
The court must approve liquidation of assets
Tax debt can be repaid over several years.

Bankruptcy law firms in Connecticut

It is important to remember that, while a Chapter 11 has many benefits, it also involves a lot of time, meetings, and thorough knowledge of bankruptcy law. If you are considering Chapter 11, consult a Connecticut bankruptcy law firm before you make any decisions.

The New Haven law firm of Coan, Lewendon, Gulliver & Miltenberger, LLC has 28 years of experience in bankruptcy law. Whether you are an individual or a company filing a Connecticut B2B bankruptcy, we will provide the support and legal counsel you need during this difficult time.