Bakersfield Bankruptcy Attorney

Chapter 11 Bankruptcy: Business Reorganization

Chapter 11 allows businesses to reorganize while continuing operations. Unlike Chapter 7 liquidation, Chapter 11 provides an opportunity to restructure debts, negotiate with creditors, and emerge as a viable enterprise. The debtor remains in control as a debtor-in-possession while operating under bankruptcy court supervision.

A reorganization plan proposes how the business will continue operating and which debts will be paid. Administrative expenses and priority claims must be paid in full unless the creditor agrees otherwise. Unsecured creditors often receive partial payment over time. Creditors vote on the plan by class, and the court must find the plan feasible before confirmation.

Chapter 13 Bankruptcy: Reorganization & Repayment

Chapter 13 protects assets while allowing you to catch up on secured debt arrears. If you're behind on mortgage payments and facing foreclosure, Chapter 13's automatic stay immediately stops the foreclosure sale. Your repayment plan spreads the mortgage arrears over three to five years while you resume making current monthly payments.

Vehicle loans receive similar treatment. If you're behind on car payments, Chapter 13 lets you cure the arrearage through the plan. In some cases, you can "cram down" the vehicle loan by paying only the car's current replacement value rather than the full loan balance.

Your repayment plan must pay priority debts in full, including recent tax obligations and domestic support arrears. Unsecured creditors receive whatever remains from your disposable income after paying priority and secured claims. After completing all plan payments, the remaining unsecured debts are discharged.

Life After Bankruptcy: Your Fresh Start

Chapter 7 discharge typically occurs four to six months after filing, eliminating personal liability for discharged debts. You're free to rebuild credit immediately, though bankruptcy remains on your credit report for ten years. Many clients obtain credit cards and car loans within months of discharge.

Chapter 11 allows for reorganization and is typically used by businesses or individuals with debt exceeding the limits of Chapter 13. For businesses, discharge often occurs upon plan confirmation, allowing operations to continue without heavy debt burdens. For individuals, discharge is generally granted upon completion of all plan payments. Successfully navigating Chapter 11 demonstrates to creditors that you have taken aggressive steps to restructure and resolve your finances.

Chapter 13 discharge occurs after completing all plan payments, usually three to five years after filing. Successfully completing Chapter 13 shows future creditors you can manage payment obligations responsibly. Bankruptcy doesn't prevent you from buying a home; conventional mortgages typically require waiting 2 to 4 years after discharge.

How The Gorski Firm Can Help

Navigating the complexities of federal court requires more than just filling out forms; it requires strategic planning to maximize exemptions and facilitate discharge. At The Gorski Firm, we leverage our founder’s unique background as both a Certified Bankruptcy Law Specialist and a former Chapter 7 Trustee to offer a distinct perspective.

We understand what trustees look for when reviewing assets and income, enabling us to address potential issues before your case is filed proactively. Whether you need to reorganize a business under Chapter 11 or seek relief from personal debt through Chapter 7, we provide the astute analysis and diligent representation needed to protect your financial future.

The Gorski Firm provides comprehensive bankruptcy representation throughout Bakersfield and Kern County. Our founder is certified by the State Bar of California Board of Legal Specialization as a Bankruptcy Law Specialist and has served as a Chapter 7 Bankruptcy Trustee for the Eastern District of California. This unique dual perspective, representing both debtors seeking relief and serving as a trustee administering cases, provides invaluable insight into how bankruptcy courts evaluate cases and which strategies yield successful outcomes.