Chapter 11 Bankruptcy Northern Virginia

When a business such as a corporation or sole proprietorship is no longer able to pay its debts, the business may seek to reorganize its finances under the protection of Chapter 11 bankruptcy. Before you make a decision, talk to the Chapter 11 bankruptcy attorneys in Northern Virginia at Tyler, Bartl, Ramsdell, & Counts, P.L.C. where we have been providing quality legal advice at reasonable prices since 1986.

If you would like a free Chapter 11 bankruptcy consultation, please call us for an appointment or complete the short contact form and you will be on your way to getting answers to your tough financial questions!

Areas We Serve

The Law Firm of Tyler, Bartl, Ramsdell, & Counts, P.L.C. is conveniently located in Old Town Alexandria, Virginia.  We serve clients seeking to file bankruptcy in the Eastern District of Virginia, including the counties of Prince William, Fauquier, Fairfax, Loudoun and other surrounding areas.

What is Chapter 11

Chapter 11 is is typically used by businesses seeking to reorganize, but it is also available to individuals.  When the business cannot service its debt, it or its creditors can file with a federal bankruptcy court for protection under Chapter 11. While the business can also cease operations altogether by filing bankruptcy under Chapter 7 (link to Chapter 7 page), in Chapter 11, the business can continue to operate and control its assets as a debtor inpossession while under the supervision and oversight of the Bankruptcy Court.

In Chapter 11, the business typically acts as its own trustee and it gives the business an opportunity to restructure various aspects of its business using a number of different mechanisms. The business can seek out new financing; it can reject and cancel contracts; it is also protected from litigation due to the automatic stay, meaning litigation is put on hold until the issue is addressed by the Bankruptcy Court. If the debts of the business exceed its assets, the owners of the business are typically left with nothing, and the company’s creditors acquire ownership of the newly reorganized company.

While all creditors have an opportunity to object to the proposed Plan of Reorganization of the business, it is the Bankruptcy Court that decides if the business reorganization complies with bankruptcy law.  Most creditors have a vote in accepting or rejecting a Chapter 11 Plan of Reorganization, but if the creditors of the business cannot be satisfied, the case may be dismissed, allowing the creditors to enforce remedies available under non-bankruptcy law Chapter 11 can also result in liquidation of the company. Depending on the size of the debt and the complexity of the case, a company can emerge from Chapter 11 in as little as a few months or remain in Chapter 11 for years before the outstanding financial issues are resolved..

Chapter 11 rationale

Chapter 11 is available because sometimes the value of a company is greater if it remains intact and continues operating rather than being sold off through liquidation. Creditors gaining ownership may well come out better under Chapter 11 bankruptcies than under liquidation. Given its flexibility, there is no wonder why Chapter 11 has been used by some of America’s largest companies having billions in assets and liabilities.

To fully understand the complexities, advantages and disadvantages of Chapter 11 bankruptcy in Virginia, you should consult an attorney.

You won’t know until you give us a call at 703-549-5000 and ask for a consultation.