Consulting with a Lawyer on Chapter 11

What is the difference between filing a chapter 11 and chapter 13? Consulting with a lawyer regarding Chapter 11 bankruptcy can help a corporation or business better deal with their situation during the lengthy process. The cost of these legal fees can range between $1,000 and $1 million for the debtor, depending on the size of the business. On top of these costs the debtor will also have to pay two fees to the court; a $1,000 case filing fee and a $39 miscellaneous administrative fee. Both of these fees must be paid at the time the debtor submits the petition for bankruptcy.

What Bankruptcy Lawyers Do

A lawyer will be able to make the entire process of filing for Chapter 11 bankruptcy a bit simpler and a bit easier to deal with from start to finish. The lawyer will also be able to answer any questions that the client has regarding the process, which paperwork to collect, how to fill out the paperwork, when to file the paperwork, how to negotiate with the creditors and much more. When meeting with the lawyer for the first time the client should explain their entire situation to the lawyer with as much detail as possible. The lawyer will take as many notes as needed so that they can understand what the client is dealing with financially. The client should not leave out any details from their story because some of those details that are left out might mean the difference between having to file for Chapter 11 and not having to file for Chapter 11.

Establishing Chapter 11 Eligibility

Once the client has hired the lawyer of their choice to represent their company during the filing process the next step is for the lawyer to determine whether their client is eligible to file for bankruptcy. The company must be able to meet the chapter 11 bankruptcy definition in order to file. Any corporation or business in the country is eligible to file for Chapter 11 as well as individuals. Experts and lawyers recommend that individuals do not file for Chapter 11 bankruptcy but for Chapter 7 or Chapter 13 under the Bankruptcy Code of the United States. Companies that have not had a prior petition for bankruptcy thrown out by the court for the failure to appear at a hearing within the previous 180 days are eligible to file for Chapter 11 bankruptcy. Also, any company that wishes to file for Chapter 11 bankruptcy must have attended credit counseling from an approved credit counseling agency at least 180 days prior to filing for bankruptcy. When filing the petition and all other paperwork with the court the debtor must also file a certificate of credit counseling with the court that proves they attended the course.

Determine the Attorney Fee in Advance

As with all other legal cases, the client and the attorney hired to represent the client must determine a fee for the attorney’s services. The fee will more than likely include travel expenses, administrative expenses, and an hourly fee for court meetings, depositions, litigation, and the meeting with the creditors. The legal fees of a bankruptcy case can cost the debtor a lot of money, sometimes to the point where they cannot afford to make payments. If this happens, the court will liquidate the assets of the company, effectively putting it out of business forever.

Provide Alternative Solutions

An experienced and well-rounded bankruptcy attorney will provide options and alternatives to filing Chapter 11 bankruptcy for their client to choose. The lawyer should examine all options available to the client and then suggest which one is best for the debtor they represent. Alternatives to bankruptcy are negotiating with creditors, restructuring payment plans, extending payment dates, reducing the amount of the debt, reducing the interest rates on a credit card, and many more.

• If you need help with filing bankruptcy, click here for a Free Case Review with a Bankruptcy Lawyer near you. The content of this website is provided for informational purposes only, and nothing here should be taken as legal advice.