Chapter 11 Bankruptcy Lawyer in Albuquerque
If your Albuquerque business is in financial distress, with no clear path out, then filing for Chapter 11 bankruptcy may be the right route for you.
Like other forms of bankruptcy, filing for Chapter 11 bankruptcy in Albuquerque grants you federal protections from collection actions or foreclosure. Unlike many other forms of bankruptcy, Chapter 11 allows petitioners to keep their business and potentially emerge from proceedings intact.
Filing for Chapter 11 is not the right choice for all businesses, but it may be the best opportunity for yours to stay afloat. If you have questions about the process, want to consider alternatives, or want guidance from an experienced Albuquerque Chapter 11 bankruptcy lawyer, New Mexico Financial & Family Law is here to assist.
Schedule a no-obligation case review and consultation when you call (505) 503-1637 or contact us online.
How to File Chapter 11 Bankruptcy in Albuquerque
All bankruptcy cases in New Mexico go through the United States Bankruptcy Court for the District of New Mexico, located in Albuquerque at the following address:
333 Lomas Blvd. NW, Suite 360
Albuquerque, NM 87102
Filing can be done online, and the Clerk’s office for the courthouse can be reached by phone at 505-415-7999 or 866-291-6805. Filers (known as petitioners) can submit all documents online using pdf files or an Electronic Self-Representation (eSR) Bankruptcy Petition.
What do I need to start filing Chapter 11 bankruptcy in Albuquerque?
The following is a simplified list of what you’ll need to do to get a hearing for your bankruptcy scheduled.
1. Receive Credit Counseling from one of the approved providers listed on the Justice Department website
2. Create an inventory of all your business’s property and possessions, including their values
3. Create a list of all the creditors your entity owes money to and the amounts it owes
4. Fill out the necessary paperwork and pay the required fees and court costs
5. Inform your creditors that you’re filing for bankruptcy
What paperwork do I need to file Chapter 11 bankruptcy in Albuquerque?
The forms required for filing a Chapter 11 bankruptcy in Albuquerque can be found here. But you will likely notice many different forms relating to chapter 11 bankruptcy. Knowing which forms are and are not necessary for your case is tricky, and requires a familiarity with the New Mexico bankruptcy laws.
The U.S. Bankruptcy Court recommends that all individuals and business entities that plan to file Chapter 11 seek legal assistance from a qualified Chapter 11 bankruptcy lawyer in Albuquerque. Any misrepresentations or mistakes on forms can affect your case, and it may cause your case to be dismissed prematurely.
Attorney Representation Required for Corporations and Partnerships
If you are not filing as a self-employed individual or a sole proprietorship, you are required to be represented by a Chapter 11 attorney in Albuquerque authorized to practice in the U.S. bankruptcy court. This is pursuant to NM LBR 1074-1.
Court Employees Cannot Legally Provide Assistance
One other reason the U.S. Bankruptcy Courts encourage petitioners to seek legal counsel when dealing with a bankruptcy is that it’s against the law for a court employee, including judges, clerk, and any administrative staff to provide legal advice, assistance, or guidance. Getting help from an Albuquerque chapter 11 bankruptcy attorney is the only way to ensure you’re prepared to file, are familiar with the court rules, and follow the procedure as expected.
Debts Discharged When a Chapter 11 Case Is Completed
The main benefit of filing for Chapter 11 is that it allows a business entity to be forgiven of its past debts. The technical term the courts use is that these debts are “discharged,” meaning the borrower no longer has a legal obligation to pay those debts. Further, creditors are legally barred from attempting to collect on those debts in any way.
Not all debts are dischargeable through Chapter 11 bankruptcy. Secured debts, such as loans on equipment or property, are not eligible for the discharge process. Instead, the lender retains the right to repossess all physical property and other materials acting as collateral.
Debts that may be discharged during a Chapter 11 bankruptcy filing include:
● Business debts
● Back rent owed on leased property
● Credit card bills
● Lines of credit with specific vendors, retailers, and partners
Automatic Stays Protect Businesses From Collection Actions
When a person or business files for Chapter 11 bankruptcy, the court grants them what is called an “automatic stay” once their case is accepted. An automatic stay is a form of legal protection that prevents all applicable unsecured creditors from making any efforts to collect on their debts. That includes any contact or attempts to freeze accounts, and so forth.
When your business is overwhelmed with debts and unsure of what solutions are available, filing for bankruptcy can be a viable way to hit pause on collections and assess the best path forward. While you may be forced to liquidate some assets in order to satisfy the terms of your bankruptcy case, your business can emerge uninhibited by your past debts and ready for its next phase of operations.
Businesses Must Be Run Optimally Towards the Benefit of Creditors During Chapter 11
In Chapter 11 cases, the business’s current operations team can remain in place for the duration of the case, but they have a new set of directives. Namely, they are expected to run the business towards the maximum benefit of the creditors. The court assigns them a fiduciary duty to do so, which can allow creditors to object to certain actions the business may wish to take.
When a business’s primary operators perform actions that its creditors object to, they have the right to file a complaint. If the bankruptcy court determines that the complaint is with merit, meaning that the business is not operating according to the best interests of repaying its outstanding liens, then a trustee may be appointed to operate the company instead.
Filing Chapter 11 as a Small Business in Albuquerque
Because certain filing deadlines are different and extensions are more difficult to obtain, a case designated as a small business case normally proceeds more quickly than other Chapter 11 cases.
For example, only the debtor may file a plan during the first 180 days of a small business case. This “exclusivity period” may be extended by the court, but only to 300 days, and only if the debtor demonstrates by a preponderance of the evidence that the court will confirm a plan within a reasonable period of time.
Because of these tight deadlines and the limited availability of extensions and other delays, it is highly advisable to work with an experienced bankruptcy attorney in Albuquerque. They will help you carefully prepare your case before you submit your petition, and their guidance and representation can help you through the whirlwind process that kicks off once your petition is accepted.
Resources for Struggling Businesses in Albuquerque
The small business community in Albuquerque remains strong, as small businesses act as the lifeblood of our local economy. According to the U.S. Small Business Administration (SBA), there were 156,996 small businesses across the state of New Mexico in 2020. These businesses employed over half (54.2%) of the state’s total private workforce in 2017.
Albuquerque is committed to assisting its small business owners through thick and thin. There are multiple programs and forms of assistance available to help boost small business profitability and get them back on solid financial footing.
Obtain a Small Business + Entrepreneurial Recovery Grant
Funded by the America Rescue Plan Act, this assistance program began on August 24, 2021. It provides one-time grants of up to $10,000 for businesses with 50 employees or fewer whose operations lie within the Albuquerque city limits. Other grant criteria may apply.
Get Contracts and a Visibility Boost From the City of Albuquerque
As part of Albuquerque’s “Buy Local” initiative, the City government prioritizes awarding contracts to vendors within the city. They also help promote local businesses through other initiatives, including promotion and networking opportunities through the Albuquerque Chamber of Commerce.
South Valley Economic Development Center: SVEDC
Part of the Rio Grande Community Development Corporation (RGCDC), a 501(c)(3) non-profit, the SVEDC is an institute and local organization dedicated to propping up small business owners and staff with a solid foundation. The center provides Business Incubation programs as well as small business support through training, networking, and informational resources. Visit https://www.svedc.org/ to learn more.
Central New Mexico Community College (CNM) Small Business Development Center
With three campus development centers throughout Albuquerque, Central New Mexico Community College is prepared to assist small business owners in any way they can. The Center provides education and development programs, as well as networking opportunities in Albuquerque.
Center staff is available to assist small business owners with assembling a loan package, revising their business plan, analyzing financial statements, preparing financial projections, and much more.
Work Through Your Period of Financial Difficulty With an Experienced Albuquerque Chapter 11 Bankruptcy Lawyer
To most people, their business is like one of their own children. They may be unsure of what to do when they are facing financial difficulty.
Speaking to a bankruptcy lawyer in Albuquerque can allow you to examine your options for moving forward. In some cases, bankruptcy may be avoided by forming formal workout agreements with each creditor. There may be options to consolidate outstanding debts or quickly sell assets to restore financial solvency.
Talk to an attorney who can help you assess your financial situation and determine what your best options are. Call New Mexico Financial & Family Law today by dialing (505) 503-1637, or contact us online. We will schedule you for a no-risk, confidential consultation to discuss your situation and your options for the future.