Best Bankruptcy Lawyers in Phoenix, AZ

What Happens When You File for Chapter 11 Bankruptcy? Unlike the other types of bankruptcy, your business becomes a "debtor in possession" after a Chapter 11 petition is filed. As a result, the company will keep control of its assets during the Chapter 11 process rather than transferring power to a bankruptcy trustee. Therefore, the business can continue running under the same management and ownership. You still have to fulfill the trustee's duties, though. And you must account for property, examine and answer claims, and file reports. The big advantage of being a "debtor in possession" is that you can acquire debtor-in-possession financing and new loans, which in many cases have better rates than what the business would have been able to get before filing. You can also cancel contracts and leases that cost too much unilaterally. If the court approves, you can also sell underused assets even if they have liens against them. This means it is even possible to rebuild the business's financial health. While the case proceeds, creditors must cease with their collection efforts — no more requests for repayment, lawsuits, or threats of eviction, foreclosure, and property seizure. Meanwhile, you must submit detailed information about the business's assets, debts, income, and expenses.