When your business is struggling and its growth is hindered by debt, filing for bankruptcy could be a way to keep the doors open while you make necessary changes. Although we always first look for solutions that do not require going into bankruptcy, sometimes that ends up being the best option. Chapter 11 bankruptcy can provide your business some relief while you reorganize your operations and get a fresh start.

Our New Jersey Chapter 11 bankruptcy lawyers are savvy and knowledgeable, with decades of experience in helping people reorganize and discharge their debt. We can analyze your current position, discuss your options, and help you select the plan of reorganization that provides you with the best chance to come out of this situation with a healthy financial outlook.

The best thing you can do is to be proactive. The sooner you address the problem head-on, the more flexibility you are likely to have. Discuss your situation with a formidable bankruptcy attorney and learn how we can use the available legal tools to help you.

An Explanation of Chapter 11 Bankruptcy

Chapter 11 bankruptcy is available to individuals, married couples, corporations, and partnerships. When an individual declares bankruptcy, it forces creditors to cease their debt collection efforts immediately. When a business is worth more than the value of its assets, Chapter 11 bankruptcy allows the business owners to continue operating while they restructure the business’s debt.

A business has 120 days from filing the Chapter 11 bankruptcy petition to provide the Bankruptcy Court with a reorganization plan that has the goal of reducing the business’s overhead. A good restructuring plan will generate profit to pay down the company’s debt. Our New Jersey attorneys are adept at designing plans of reorganization that give a company the best chance of emerging from Chapter 11 bankruptcy stronger and more resilient.

After filing the reorganization plan, the individual’s or company’s creditors will review it and can decide to object. The creditors can then submit their own reorganization plans for the court’s consideration. The bankruptcy court makes the final decision and usually selects the plan of reorganization that gives the best chance of survival. If the court decides that a company is not viable, it can convert the proceeding to a Chapter 7 bankruptcy and order the company to liquidate its assets.

Chapter 11 Can Protect Business Owners’ Assets

One of the advantages of Chapter 11 bankruptcy is that it safeguards an owner’s personal assets in many, but not all, cases. We can review your situation and give you a frank assessment of whether your assets could be at risk in a Chapter 11 bankruptcy proceeding.

Sole Proprietors

A sole proprietorship’s assets are indistinguishable from their personal assets. Thus, their home, car, and retirement savings are potentially at risk if they file for Chapter 11 bankruptcy. A Chapter 13 bankruptcy could protect those assets, but it is not available if the petitioner’s debt exceeds $1,000,000 in secured debt or $330,000 in unsecured debt.

A sole proprietor who cannot file for Chapter 13 bankruptcy could find that a Chapter 11 reorganization plan requires them to liquidate some personal assets. Our Chapter 11 bankruptcy attorneys in New Jersey will make every effort to design a plan that protects your home and other personal assets, and defend you against creditors’ attempts to force you to give them up.


In most cases, a partner’s assets are separate from the partnership’s, except for their investment in the partnership. A partner’s personal assets are usually not at risk in a Chapter 11 bankruptcy. However, a partner is an equity holder, and equity holders cannot receive any money from the partnership until all its creditors are paid in full. In practical terms, a partner who is not receiving income from the business for years might have to liquidate their personal assets or declare personal bankruptcy.


Chapter 11 bankruptcy is often the preferred method for corporations to reorganize. Chapter 11 does not put the shareholders’ assets at risk, except for their investment in the corporation. It allows the business to continue operating while reducing its debt to a manageable amount and protects it from creditors’ collection attempts.

Investigate Your Options with a New Jersey Chapter 11 Bankruptcy Attorney

If your sole proprietorship or partnership is failing or at risk due to excessive debt, then exploring solutions early can increase your chances of saving it. Various forms of bankruptcy protection are available, each with distinct costs and benefits.

A New Jersey Chapter 11 bankruptcy lawyer can help you decide whether a plan of reorganization is the best option for your business. Schedule a free case review with the experienced team at Gillman, Bruton & Capone.