Chapter 11 in Maryland
Chapter 11 bankruptcy is a form of bankruptcy that allows individuals and businesses to restructure debt payments and keep assets. In contrast to Chapter 11, Chapter 7 bankruptcy and Chapter 13 is usually filed by individuals who want to pay off their debts over a period of three to five years.
Maryland Chapter 11 bankruptcy is based on the realization that the value of a reorganized business will be substantially larger than the value of the assets of the business were they to be sold individually. A business under the protection of Chapter 11 in Maryland can cancel some of its debts. Most importantly, it can also transfer some or all of the newly reorganized company to creditors whose debts were cancelled. By doing this, jobs may be saved and the remaining creditors may have smaller losses than if the company is dismantled or liquidated.
Individuals and These businesses may file a Chapter 11 in Rockville and throughout Maryland:
The party that files for Chapter 11 bankruptcy in Maryland is called the debtor in possession. The term is apt since the business that is in debt keeps possession of the bankruptcy assets while going through the process of reorganization in Maryland.
During a business Chapter 11 bankruptcy proceeding, the owner of the business remains in possession until one of the following happens:
- The reorganization plan is confirmed
- The case is converted to a Chapter 7 case
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- The case is dismissed
- A bankruptcy trustee is appointed
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A major benefit of a Chapter 11 bankruptcy in Frederick or in Maryland, is that a debtor is allowed to keep all or a portion of its assets. In contrast, under Chapter 7 bankruptcy, a debtor can retain only a limited amount of exempt property. Under the U.S. Bankruptcy Code, businesses are not allowed to exempt property.
Contact us for skilled legal guidance
A skilled Maryland bankruptcy attorney at the law offices of Goren, Wolff & Orenstein, L.L.C. can offer advice and answer all your questions about bankruptcy. We have has over 75 years of experience representing corporations and individuals in all types of Rockvlille, Montgomery County and Frederick, Maryland bankruptcy proceedings and litigation. To schedule a free consultation to discuss your case with us, contact us today.
