How Often Can I Declare Bankruptcy?
If you have filed for bankruptcy before and received a discharge of debt, you need to wait before you can file for bankruptcy again. The federal bankruptcy code specifies when…
Vitality Health Plan of California recently filed for Chapter 11 bankruptcy protection in December 2018. The company primarily offers Medicare Advantage plans for California residents. Several prominent California hospitals canceled their contracts with Vitality Health earlier in the year after their financial situation deteriorated. Since this summer, the company has had negative working capital, though it is required to maintain a few million dollars in reserve.
When Vitality Health Plan filed for Chapter 11 bankruptcy, they had over $1 million in estimated assets and over $10 million in estimated liabilities, as stated in their petition for Chapter 11 bankruptcy. Regional Medical Center in San Jose, California, is the creditor with the largest claim of unsecured debt against Vitality Health Plan.
Is Filing for Chapter 11 Bankruptcy Right for You?
Vitality Health Plan of California is only one of many companies to file Chapter 11 bankruptcy in California. Shutdowns related to the coronavirus pandemic have caused businesses in many industries to suffer. If you own a small to medium-sized business and you are struggling to make payments on your business debt, filing for Chapter 11 bankruptcy could help you significantly.
You may not want to file for Chapter 7 bankruptcy because you do not want to liquidate most or all of the assets owned by your business to pay off your debt. If a bankruptcy trustee sells your assets to pay your debts, you will not be able to continue operating your business. Filing Chapter 11 bankruptcy will allow you to keep your assets and continue operating your business while restructuring your debt.
Filing for Chapter 11 bankruptcy allows you some much needed time to evaluate your financial situation and create a plan to repay your debt. After you file for a Chapter 11 bankruptcy, you can re-evaluate your debts and revenue sources and work with your lawyer and your bankruptcy trustee to develop a repayment plan. The goal of your bankruptcy plan is to put your business back on the road to financial success.
Filing for a Chapter 11 Bankruptcy
After you file a petition for Chapter 11 bankruptcy, the court will impose an automatic stay, prohibiting your creditors from pursuing debt collection actions from you. Next, you will develop your reorganization plan. Reorganization plans typically include renegotiating your leases and contracts, assessing your company’s debts, and prioritizing which creditors must receive payment first and which must be repaid in full. You will likely have the opportunity to discharge part of all certain debts. The court will assign a trustee to manage your case and help you proceed through the Chapter 11 bankruptcy case.
Contact a San Diego Chapter 11 Bankruptcy Lawyer
If you are considering filing for bankruptcy, speaking to an experienced lawyer is important. At Bankruptcy Law Center, our lawyers have a proven track record of successfully guiding our clients through the bankruptcy process. Contact us today to schedule your initial consultation.
