Florida Chapter 11 Bankruptcy. While filing for bankruptcy, Chapter 11 is an option given to individuals and businesses to reorganize their finances and pay their creditors. This law allows debtor to sell off certain assets which may fetch a higher price to pay back loans. Though this chapter is rarely applied by individuals, it is used when their home loan debt becomes too large for debt relief under Chapter 13 and the property has to be sold to the first bidder within a short period of time. Similar to the rest of the United States, Florida too faces its own cases of Chapter 11 wherein wealthy businessmen and real estate investors had to sell property to pay off debtors to pay back mortgage loans.
Chapter 11 Filing by small business
In Florida there are several small businesses which have filed for Chapter 11 to help them pay off suppliers and protect their capital assets. This option can help to restart their business. With the economic slowdown and reduction in tourists the travel and leisure industry has suffered severe setbacks in terms of seasonal and longer term business. Chapter11 bankruptcy filing may give protection from I.R.S. collection and taxes until all payments are made. In many cases it grants debtors some relief. According to law these are some non-priority taxes which can be paid over a period of time. This may allow a business seized by the IRS to be reopened to generate business and pay back creditors.
Chapter 11 bankruptcy and taxes
People in general are confused about the various bankruptcy laws like Chapter 11, Chapter 7 and Chapter 13 as to which one will be best for them to reduce debts and postpone taxes for a short period of time. Though bankruptcy filing under Chapter 11 grants you relief from income taxes it does not discharge excise or fuel charges.
Chapter 11 bankruptcy and advantages
- The purpose of using Chapter 11 is to ensure that the business is unharmed and can continue unimpaired.
- Reorganization Plan under Chapter 11 allows for revamping of the financial matters and obligations.
- Existing loans can be refinanced, time period of the payments can be increased, interest rates can be reduced to the extent of the reduction seen in the current time and other difficult terms and conditions can be deleted or altered.
- In the event a company files for Chapter 11 bankruptcy, it can develop a plan to pay creditors over a period of time. But, this plan has to be approved by a Court- appointed trustee. The creditors do have a say in this matter. The plan to pay creditors can include the provision to reopen IRS seized business as well.
Large debt holding individuals tend to file for Chapter 11 due to greater flexibility. This option may also cost less in terms of legal fees. It protects secured assets and gives the opportunity to keep certain assets if the creditors agree to the court’s disbursement strategy. The biggest advantage of a Chapter 11 debtor is that they retain control over their fixed property or real estate though a court appointed trustee. This trustee manages the businesses day-to-day affairs to ensure that owner do not cause any mismanagement.
If you have any questions about Florida chapter 11 bankruptcy or would like to speak to us about your options, please contact us at (813) 518-7411. We represent clients during stressful and difficult times in their lives. We are empathetic, responsive, and push for a quick resolution. We look forward to helping you resolve your issue quickly, fairly, and in a way that will help you to return to the stable, predictable life that you deserve.