Chapter 11 Iowa City Business Bankruptcy Lawyer & Business Bankruptcy Law Firm

What is a Chapter 11 Business Bankruptcy? Who would file a Chapter 11 bankruptcy in Iowa City?

A bankruptcy case filed under Chapter 11 of the U.S. Bankruptcy Code will generally be filed by an Iowa City area business, although this chapter is also available to individuals. While a business may choose to file a Chapter 7 bankruptcy (liquidation), it may not file a Chapter 13 bankruptcy (reorganization) because these are reserved for individuals. But it is very common for a business to want to reorganize its debts and stay in business rather than filing a Chapter 7 and liquidating all of its assets. Chapter 11 bankruptcies are available to Johnson County businesses for this purpose (i.e., staying in business and restructuring the company's debts). Whether you are a small business or a large business, debt can beome overriding.

There are some famous Chapter 11 bankruptcy cases filed by some high profile companies: Lehman Brothers in 2008 (during the Wall Street collapse); Washington Mutual Bank which was quickly acquired by Chase Bank; and the Enron bankruptcy which brought to light unlawful accounting practices. It doesn't take unlawful accounting practices to get a business, even a small business, into trouble ... the current economy combined with poor bookkeeping and/or lack of financial planning can cause problems and conceal a looming financial crisis for Iowa City businesses.

A business does not have to be completely insolvent before it is allowed to file a Chapter 11 bankruptcy case. Accountants and bookkeepers in the Iowa City, Johnson County, Iowa, area can provide invaluable financial support to businesses and provide guidance of when it might be time to seek the advice of a qualified Iowa City Chapter 11 bankruptcy attorney. Some Iowa City area financial professionals include:

The main reason an individual or married couple would want to file a Ch. 11 bankruptcy instead of a Ch. 13 case is because their debts may exceed the limits allowed in chapter 13 bankruptcy cases. Although similar to ch.13, an Iowa City Chapter 11 bankruptcy is much more complicated and requires the advice of a qualified Iowa City Bankruptcy Attorney.

Common types of creditors in Iowa City, Iowa, with whom a person may have very high debts that disqualify them filing a chapter 13 bankruptcy:

Banks and Mortgage Companies such as MidWestOne Bank, (102 South Clinton Street, Iowa City, IA 52240) and Irvin Pfab, (505 E Jefferson Street, Iowa City, IA 52245).

Car Dealers such as Carousel Mazda, (809 Highway 1 West Iowa City, Iowa City, IA 52246) and Billion Honda of Iowa City, (2641 Mormon Trek Boulevard, Iowa City, IA 52240).

Jewelry Stores such as Herteen & Stocker Jewelers, (101 S Dubuque Street, Iowa City, IA 52240) and Iowa Artisans Gallery, (207 E Washington Street, Iowa City, IA 52240).

The Basics of a Chapter 11 Iowa City Bankruptcy:

A qualified Iowa City Bankruptcy Law Firm will have the expertise to guide their clients through the Chapter 11 bankruptcy process. Here are the common steps for Chapter 11 cases filed in Iowa City and Johnson County, Iowa (but they may vary depending on specific circumstances):

► The case begins when the petition is filed with the bankruptcy court. Johnson County cases are filed with the Iowa Southern Bankruptcy Court located in United States Courthouse Annex , 110 East Court Avenue, Des Moines, IA 50309 - (515) 284-6230.

► The filing fee of $1,000 and administrative fee of $39 are paid.

► Upon filing of the petition and pursuant to Section 1107 of the bankruptcy code, the debtor assumes the responsibilities normally assigned to a trustee (as in a Chapter 7 or Chapter 11 case) and is known as "debtor in possession." This means the debtor may continue to operate the business, including paying employees.

► The debtor in possession also has the responsibility of filing monthly operating reports with the Court and the U.S. Trustee, filing and paying taxes, and creating a plan for reorganization.

► Although the debtor is given the authority to continue to operate the business in the ordinary course of business, the debtor is expected to do so in a manner in the best interest of all concerned. The interest of the creditors is protected by the formation of various creditor committees. These committees will have much influence on the reorganization plan being developed by the debtor in possession.

► A plan is proposed, a confirmation hearing is held, and eventually a plan will be confirmed.

► The plan is implemented.

► Confirmation of the plan can also mean discharge of debts incurred prior to confirmation, but there are many variables including whether the debtor is an individual or a business. Your Iowa City Bankruptcy Attorney will advise you on the effects of confirmation of your plan.

Contact an Iowa City Bankruptcy Attorney for advice and consultation about filing a Ch. 11 Johnson County Bankruptcy.

Serving clients throughout Eastern Iowa, including Anamosa, Burlington, Cedar Falls, Cedar Rapids, Clinton, Davenport, De Witt, Dubuque, Ely, Fairfield, Iowa City, Iowa Junction, Kalona, Manchester, Maquoketa, Marion, Marshalltown, Mason City, New London, Newton, North Liberty, Oskaloosa, Ottumwa, Solan, Vinton, Walford, Washington, Waterloo, West Liberty, Williamsburg, areas in the vicinity of Iowa City Municipal Airport, and other communities in Johnson County.