Chapter 11 Bankruptcy Lawyer in Hamden, Connecticut

If you’re burdened with overwhelming debt and seeking a way to salvage your finances, filing for Chapter 11 bankruptcy might be the solution you need. Here at Sacramone Law, I guide businesses and individuals through Chapter 11 bankruptcy so they can regain control of their financial future.

Located in Hamden, Connecticut, I work with clients in New Haven County and throughout Connecticut and can assist with bankruptcy needs. Contact my firm today to set up a time to discuss your case and options for moving forward.  

The Basics of Chapter 11 Bankruptcy 

Often referred to as “reorganization bankruptcy,” Chapter 11 is primarily designed for businesses but can also apply to individuals with significant debt. It allows you to restructure your debt while continuing to operate your business or manage your personal finances.  

Under Chapter 11 bankruptcy, the debtor establishes a reorganization plan that specifies how they will restructure their debt and repay creditors. Before it can be implemented, this plan must be approved by the bankruptcy court and a majority of their creditors.  

Chapter 11 also allows debtors to renegotiate terms with their creditors and can temporarily halt collection actions against them. It aims to maximize the value returned to creditors while providing the debtor with a viable path to financial recovery. 

Key Benefits of Chapter 11 

• Continued operations: Keep your business running while working on a plan to pay off your debts. 

• Debt restructuring: Renegotiate terms with creditors to make your debt more manageable. 

• Asset retention: There is no need to sell off all your assets. 

• Creditor protection: Automatic stay provisions protect you from creditor harassment and collection efforts during the bankruptcy process. 

• Flexible repayment plans: Customize repayment plans to fit your financial situation and capabilities. 

• Opportunity for a fresh start: Offers a second chance to rebuild and strengthen your financial standing. 

• Management retention: Allows you to retain control over business operations and decisions throughout the restructuring process. 

The Chapter 11 Process 

Filing the Petition 

The process begins with filing a petition in the appropriate bankruptcy court. This petition includes detailed financial statements, a list of assets and liabilities, and a statement of your current income and expenses. 

Creating a Reorganization Plan 

Debtors propose a reorganization plan that outlines how they intend to repay creditors over time. This plan must be feasible and consider the best interests of creditors. It typically outlines changes to business operations and financial practices. 

Gaining Approval 

Once the plan is submitted, creditors will vote on its approval. If the majority agrees, the court will conduct a hearing to ensure the plan meets all legal requirements before giving it the green light. 

Implementing the Plan 

The plan goes into effect upon court approval. Debtors start making payments according to the new terms while continuing to operate their businesses or manage their finances under the court’s supervision. 

Monitoring Progress 

Once the plan is in effect, both the court and creditors will periodically review your progress. You will need to provide regular financial reports and updates to demonstrate that you are adhering to the reorganization plan. This ongoing oversight ensures that you remain on track and that creditors are receiving payments as agreed. 

Modifying the Plan 

If circumstances change and you are unable to adhere to the original plan, you may request modifications. Modifications must be approved by the court and may also require creditor approval. This flexibility allows for adjustments to payment terms or timelines to reflect your current financial situation, so you can continue working towards a successful financial recovery. 

Legal Considerations in Connecticut 

Here are some Connecticut laws and regulations that impact the Chapter 11 process: 

• Homestead exemption: Connecticut offers a homestead exemption of up to $75,000 for real property or mobile homes, which can help protect your residence during bankruptcy proceedings. 

• Wage exemption: Up to 75% of your earned but unpaid wages are protected from creditors. 

• Personal property: Connecticut allows exemptions for personal property, including household goods, clothing, and tools of the trade, which can be necessary to continue your business operations. 

• Wild card exemption: You can protect up to $1,000 of any personal property or cash using the wild card exemption, providing more flexibility in safeguarding your assets. 

• Motor vehicle exemption: Connecticut law permits an exemption of up to $3,500 for the equity in one motor vehicle. 

• Pension and retirement accounts: Most tax-exempt retirement accounts, such as IRAs and 401(k) accounts, are protected under Connecticut exemptions to safeguard your long-term financial security.