Filing for Chapter 11 in Philadelphia

There are many different types of bankruptcy filings available for those who have unmanageable debt, but if you are a business owner or an individual who has over a million dollars in secured debt, then filing for Chapter 11 in Philadelphia is likely a strategy worth your consideration. When a business is unable to pay its bills and needs a way to continue operations while cutting its losses, corporate bankruptcy offers a lifeline. If you are facing these types of challenges and want to know whether filing for Chapter 11 in Philadelphia is the right answer for you, call the bankruptcy lawyers at Erik B. Jensen Attorneys at Law for sound advice.

The steps for filing for Chapter 11 in Philadelphia are relatively straightforward.  Once a petition is filed, the organization is required to pay a filing fee of $1,717 and to provide the Trustee assigned to manage its case quarterly fees that represent the payments to its creditors that have been agreed upon. These fees are dependent upon how many creditors there are and how much debt the company carries. The company will also open up a special account called a debtor in possession account from which payments will be paid to creditors, and is also required to provide statements regarding its finances on a monthly basis. A proposed payment plan has to be submitted to creditors for consideration, and the creditors then vote whether to accept or reject the plan – in the case of a rejection then a new proposal has to be submitted for consideration or the creditors’ objections overridden. Once the plan is accepted, then the payments must be made according to the plan and its schedule.

Filing for Chapter 11 in Philadelphia has both advantages and disadvantages. As is true for all bankruptcies, it will stop all actions against the debtor so that there are no longer concerns about property being seized, Sheriff’s sales, evictions or other similar actions. The company’s owners can determine how they want to address their various debts and which they most wish to escape from; it can also attempt to renegotiate the terms of a debt in a way that is more advantageous. Despite the better position that these actions can represent, there are also serious considerations to filing for Chapter 11, including the need for continuous transparency of all financial records and the closure of all the company’s bank accounts. The only account that is left will be the debtor in possession account, which will constantly be monitored by the Trustee. A good deal of autonomy is lost in the process of filing for a Chapter 11 bankruptcy.

Though filing for Chapter 11 can prove to be an effective strategy, it is something that should not be entered into lightly. If you are facing economic hardship and need to discuss your situation with an experienced Chapter 11 bankruptcy lawyer, contact Erik B. Jensen Attorneys at Law today to set up a convenient time to meet and discuss your situation.