Fargo Chapter 11 Bankruptcy Lawyers

Guiding Individuals and Businesses Through the Chapter 11 Process

If you are facing mounting debt in Fargo, ND, Chapter 11 bankruptcy might be one debt relief option for you. Many people think about businesses when it comes to Chapter 11 eligibility, but some individuals may file Chapter 11 as well. The Dakota Bankruptcy Firm helps individuals and businesses restructure their debts through Chapter 11 without jeopardizing their day-to-day operations.

Schedule a free initial consultation with The Dakota Bankruptcy Firm online or by calling (701) 394-3215 for more information on your Chapter 11 options.

What is Chapter 11 Bankruptcy?

Explore Chapter 11 Bankruptcy Solutions with The Dakota Bankruptcy Firm

Chapter 11 bankruptcy is a form of “reorganization” bankruptcy that allows you to restructure your debts and assets so you can pay everything off while still running your business. More specifically, the reorganization plan in Chapter 11 will allow you to delineate how certain debts will be handled. Your creditors will either accept or reject your reorganization plan. If a creditor objects to the plan, the court will decide whether to confirm the plan based on the following criteria:

  • It is feasible or likely to succeed – the debtor must prove they can raise sufficient funds to pay their creditors and cover expenses.
  • It was proposed in good faith – the debtor does not have ulterior motives for pursuing bankruptcy.
  • It meets the best interests of the creditors – this "best interests" test requires either (1) the creditors receive at least as much as they would if the case were converted to Chapter 7, where your property would be liquidated to pay them back; or (2) you pay all your creditors nearly in full. 
  • The plan is "fair and equitable" – the "fair and equitable" test considers whether the secured creditors will be paid, over time, at least the value of their collateral and that you not retain any equity interests unless all obligations are paid in full.

The reorganization plan can be one of the more confusing and complex steps as it involves drafting a detailed plan of action subject to your creditors’ objections, so it is best to consult an experienced Chapter 11 lawyer to make sure you have a strong plan that meets your interests as much as it meets your creditors’ approval.

Chapter 11 Bankruptcy: A Guide for Businesses

Chapter 11 works in different ways for businesses vs. individuals. During the Chapter 11 process for businesses, your business may continue operating, either under your direction or under the direction of a court-appointed trustee. Note that while your business may still operate, you must obtain the bankruptcy court’s approval for the following actions:

  • entering or terminating a lease;
  • closing down or expanding your operations;
  • selling any assets like real property;
  • establishing mortgage or other financing arrangements that allow you to borrow money;
  • entering or modifying union, vendor, licensing, and other agreements; and
  • retaining and paying fees to attorneys and other professionals.

Subchapter V of Chapter 11 is a simplified process for small businesses whose debts do not exceed 2.75 million and of which at least 50% were accumulated due to business activities. Subchapter V can require creditors to accept court-approved repayment plans of 3-5 years (rather than having the process drag on with rejections of the plan). It also allows debtors to let go of some of their unsecured debt that has no collateral (e.g., credit card debt).

Understanding Chapter 11 for Individual Debtors

While Chapter 11 is often discussed in the context of businesses, certain individuals may also elect to file Chapter 11. In general, Chapter 7 and Chapter 13 are more viable options for individual debtors. However, you might want to pursue Chapter 11 in the following scenarios:

  • your unsecured debts exceed the Chapter 13 debt ceiling of $360,475; or
  • you want to rewrite your real estate investment mortgages (Chapter 11 allows you to reduce the principal mortgage balance to the current value of the property and can also help you reduce your monthly mortgage payment amount).

Chapter 11 is one of the lengthier bankruptcy processes and requires careful attention to detail during the reorganization plan proposal. The Dakota Bankruptcy Firm can help you navigate the filing process, as well as help you determine whether Chapter 11 is the best option for you as a business or as an individual debtor.

Need Chapter 11 Bankruptcy Guidance? Contact The Dakota Bankruptcy Firm Today online or call (701) 394-3215. Let’s get you back on track and out of debt.


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Why Clients Continue to Choose Our Dedicated Legal Team

  1. 1
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