Overview: What Is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is a court-supervised reorganization that helps businesses and high-debt individuals restructure their finances while maintaining operations. Unlike Chapter 7, which results in liquidation, Chapter 11 allows debtors to propose a plan to repay creditors over time. Wallace Law, PLLC has helped companies across Dallas, Fort Worth, and the surrounding areas preserve value, protect jobs, and return to profitability using the Chapter 11 process.

Who Uses Chapter 11?

Chapter 11 is commonly used by:
– Small and mid-sized businesses (LLCs, S-corps, partnerships)
– Real estate holding entities with multiple properties
– Franchise owners with unmanageable lease or vendor debt
– Professionals and individuals with personal guarantees or high tax debt
– Commercial landlords facing vacancies and arrears
Even high-income individuals ineligible for Chapter 13 can file under Chapter 11.

Subchapter V for Small Businesses

Subchapter V is a streamlined version of Chapter 11 designed for businesses with less than $7.5 million in non-contingent debt. It eliminates many of the burdensome features of traditional Chapter 11, such as:
– No need to pay quarterly U.S. Trustee fees
– No mandatory creditors’ committee
– No disclosure statement (unless ordered)
– Owners can retain equity without contributing new capital
Most Dallas-area small businesses benefit from Subchapter V, enabling faster plan confirmation and reduced legal fees.

The Chapter 11 Process in Dallas

1. **Pre-filing Analysis**: We assess your financials, business model, and goals.
2. **Filing the Petition**: Includes a detailed list of assets, liabilities, income, expenses, and a statement of financial affairs.
3. **Debtor-in-Possession (DIP)**: You remain in control of day-to-day operations, subject to court oversight.
4. **Automatic Stay**: All creditor actions, including lawsuits and foreclosures, are frozen.
5. **Plan of Reorganization**: We propose a repayment plan that restructures debt, cures defaults, and adjusts terms.
6. **Creditor Voting and Confirmation**: If the plan meets legal standards, the court can approve it even without all creditor votes.
7. **Implementation**: Payments begin, reporting is maintained, and operations stabilize.

What Debts Can Be Reorganized?

– Commercial mortgage arrears and loan balances
– Equipment financing and vendor obligations
– Franchise and lease agreements
– Payroll taxes, IRS debt, and sales taxes
– Lawsuits and judgments (including personal guarantees)
Priority debts must generally be paid in full, while unsecured debts can often be reduced or stretched out.

Texas Exemptions That Protect Owners

While the business itself may not claim exemptions, individual filers and business owners can often protect their assets:
– **Homestead**: Unlimited equity for primary residence in Texas
– **Vehicle**: One per household member
– **Tools of the Trade**: Up to $12,500 for individuals or $25,000 for families
– **Retirement Accounts**: 100% exempt
– **Personal Property**: $50,000 individual / $100,000 family
Wallace Law helps you structure filings to preserve maximum property while achieving debt relief.

Case Study: North Dallas Retailer Recovers from COVID-19 Impact

A multi-location clothing store in North Dallas faced over $900,000 in unpaid rent and vendor debt after pandemic shutdowns. We filed under Subchapter V, renegotiated lease terms with landlords, and paid vendors 30 cents on the dollar. The plan was confirmed in 6 months, saving the business and 30 jobs.

Case Study: Real Estate Developer in Arlington Restructures $2.4M Debt

Our client, a real estate investment group, fell behind on development loans. Chapter 11 allowed them to sell certain parcels, restructure mortgages, and gain court protection during zoning delays. The reorganization plan avoided personal liability and preserved future development income.

Why Clients Choose Wallace Law, PLLC

– Local expertise with the Northern District of Texas Bankruptcy Court and the Eastern District of Texas Bankruptcy Court
– Experience handling both Subchapter V and full-scale reorganizations
– Practical, results-driven counsel for business owners and real estate professionals
– Commitment to preserving operations and avoiding unnecessary liquidation
– Responsive service and a track record of confirmed plans throughout DFW

Proudly Serving

Dallas, Fort Worth, Plano, Arlington, Addison, Flower Mound, Lewisville, Denton, Richardson, Grand Prairie, North Richland Hills, DeSoto, Southlake, North Dallas, and Highland Park.

Chapter 11 Bankruptcy

Overview: What Is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is a court-supervised reorganization that helps businesses and high-debt individuals restructure their finances while maintaining operations. Unlike Chapter 7, which results in liquidation, Chapter 11 allows debtors to propose a plan to repay creditors over time. Wallace Law, PLLC has helped companies across Dallas, Fort Worth, and the surrounding areas preserve value, protect jobs, and return to profitability using the Chapter 11 process.

Who Uses Chapter 11?

Chapter 11 is commonly used by:
– Small and mid-sized businesses (LLCs, S-corps, partnerships)
– Real estate holding entities with multiple properties
– Franchise owners with unmanageable lease or vendor debt
– Professionals and individuals with personal guarantees or high tax debt
– Commercial landlords facing vacancies and arrears
Even high-income individuals ineligible for Chapter 13 can file under Chapter 11.

Subchapter V for Small Businesses

Subchapter V is a streamlined version of Chapter 11 designed for businesses with less than $7.5 million in non-contingent debt. It eliminates many of the burdensome features of traditional Chapter 11, such as:
– No need to pay quarterly U.S. Trustee fees
– No mandatory creditors’ committee
– No disclosure statement (unless ordered)
– Owners can retain equity without contributing new capital
Most Dallas-area small businesses benefit from Subchapter V, enabling faster plan confirmation and reduced legal fees.

The Chapter 11 Process in Dallas

1. **Pre-filing Analysis**: We assess your financials, business model, and goals.
2. **Filing the Petition**: Includes a detailed list of assets, liabilities, income, expenses, and a statement of financial affairs.
3. **Debtor-in-Possession (DIP)**: You remain in control of day-to-day operations, subject to court oversight.
4. **Automatic Stay**: All creditor actions, including lawsuits and foreclosures, are frozen.
5. **Plan of Reorganization**: We propose a repayment plan that restructures debt, cures defaults, and adjusts terms.
6. **Creditor Voting and Confirmation**: If the plan meets legal standards, the court can approve it even without all creditor votes.
7. **Implementation**: Payments begin, reporting is maintained, and operations stabilize.

What Debts Can Be Reorganized?

– Commercial mortgage arrears and loan balances
– Equipment financing and vendor obligations
– Franchise and lease agreements
– Payroll taxes, IRS debt, and sales taxes
– Lawsuits and judgments (including personal guarantees)
Priority debts must generally be paid in full, while unsecured debts can often be reduced or stretched out.

Texas Exemptions That Protect Owners

While the business itself may not claim exemptions, individual filers and business owners can often protect their assets:
– **Homestead**: Unlimited equity for primary residence in Texas
– **Vehicle**: One per household member
– **Tools of the Trade**: Up to $12,500 for individuals or $25,000 for families
– **Retirement Accounts**: 100% exempt
– **Personal Property**: $50,000 individual / $100,000 family
Wallace Law helps you structure filings to preserve maximum property while achieving debt relief.

Case Study: North Dallas Retailer Recovers from COVID-19 Impact

A multi-location clothing store in North Dallas faced over $900,000 in unpaid rent and vendor debt after pandemic shutdowns. We filed under Subchapter V, renegotiated lease terms with landlords, and paid vendors 30 cents on the dollar. The plan was confirmed in 6 months, saving the business and 30 jobs.

Case Study: Real Estate Developer in Arlington Restructures $2.4M Debt

Our client, a real estate investment group, fell behind on development loans. Chapter 11 allowed them to sell certain parcels, restructure mortgages, and gain court protection during zoning delays. The reorganization plan avoided personal liability and preserved future development income.

Why Clients Choose Wallace Law, PLLC

– Local expertise with the Northern District of Texas Bankruptcy Court and the Eastern District of Texas Bankruptcy Court
– Experience handling both Subchapter V and full-scale reorganizations
– Practical, results-driven counsel for business owners and real estate professionals
– Commitment to preserving operations and avoiding unnecessary liquidation
– Responsive service and a track record of confirmed plans throughout DFW

Proudly Serving

Dallas, Fort Worth, Plano, Arlington, Addison, Flower Mound, Lewisville, Denton, Richardson, Grand Prairie, North Richland Hills, DeSoto, Southlake, North Dallas, and Highland Park.