Friday, September 9, 2011

Chapter 11 Bankruptcy: Cram Down

What many of our client’s and others did during the real estate boom of the last decade was purchase investment properties in order to enhance their financial future.  With property values 30 to 40 per cent below the original purchase price combined with increasing mortgage rates, real property owners have been pushed to seek relief through filing for Chapter 11 Bankruptcy. One of their hopes in filing a Chapter 11 is to obtain acceptance of a cram down.  Under certain circumstances, the bankruptcy court may "cram down" a plan over the objection of creditors. The term "cramdown" comes from the idea that the loan changes are "crammed down" creditors' throats - they can either renegotiate the loan through a Chapter 11 reorganization, or lose everything through a Chapter 7. Individuals and business owners should understand the risks and rewards of filing Chapter 11 bankruptcy. You should do your own independent research, contact a qualified attorney and accountant who are familiar with the strict mandatory Chapter 11 Bankruptcy filings in order to have an successful outcome.

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Refereces: http://www.uscourts.gov/Home.aspx
                   www.investopedia.com

Tuesday, August 23, 2011

A Reason For Dismissal Of Your Chapter 11 Bankruptcy

A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a reorganization bankruptcy.  A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors that meet certain requirements. The voluntary petition will include standard information concerning the debtor's name(s), social security number or tax identification number, residence, location of principal assets (if a business), the debtor's plan or intention to file a plan, and a request for relief under the appropriate chapter of the Bankruptcy Code. Upon filing a voluntary petition for relief under chapter 11 or, in an involuntary case, the entry of an order for relief, the debtor automatically assumes an additional identity as the debtor in possession. The term refers to a debtor that keeps possession and control of its assets while undergoing reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. Dismissal is something you want to avoid when possible. The dismissal of a bankruptcy case ends it, including most of the legal consequences of the bankruptcy filing, but without giving the debtor relief from its debts. There are many reasons for a dismissal; one is not filing your Monthly Operating Report correctly. Debtors in Chapter 11 are required to file Monthly Operating Reports with the U.S. Trustee’s Office, which is the watchdog agency for the bankruptcy process. On a monthly basis, debtors are required to file reports showing its receipts and disbursements, changes in its liability/asset picture, and verification that it is timely paying its ongoing obligations, including taxes and insurance.  If you like any further information regarding a Monthly Operating Report contact us http://wjaccountingsolutions.com/index.html

Monday, August 22, 2011

Chapter 11: Monthly Operating Report

If you have found your way to this Blog, you are probably someone thinking about filing for Chapter 11 Bankruptcy, or you already have filed.  If you are considering Chapter 11 to reorganize your debt obligations, be sure to find a qualified bankruptcy attorney - a specialist, not a DUI attorney who does bankruptcies on the side.  Chapter 11 bankruptcies are too complicated, and you have too much at stake to be wasting your time and money if your Chapter 11 bankruptcy fails to be confirmed. Your attorney can determine what kind of bankruptcy is appropriate for your circumstances. One thing that your attorney probably cannot help you with is the Monthly Operating Reports that you have to file each month.  You can find templates for these reports specific to your regional US Bankruptcy Court and attempt to file them yourself.  However, be forewarned Monthly Operating Reports are often rejected because they are done incorrectly.  If this happens, your Chapter 11 bankruptcy petition is in jeopardy.  Then you will have wasted a lot of money on attorney fees and filing costs.  An accountant experienced with Chapter 11 requirements can help you avoid having your Monthly Operating Reports rejected. It all comes down to how serious you are about reorganizing and saving your business.  If you have any questions regarding this matter feel free to contact us.  http://wjaccountingsolutions.com/index.html