Keeping Commercial Property During Bankruptcy

Bankruptcy can be a trying and disruptive experience for any individual.  During a bankruptcy you may be forced to give up your home, your vehicles, or other property that you own in order to repay debts that are outstanding to creditors who have been hounding you attempting to collect the money.  A bankruptcy can be an even more damaging proposition if you are the owner of a business or other commercial properties that could generate revenue to help you repay your bills, but that must now be considered as an asset in your bankruptcy proceedings.  Can you keep commercial property through a bankruptcy proceeding?

Keeping Commercial Properties in Bankruptcy

Since many bankruptcies involving commercial assets are of the Chapter 11 variety, which is a type of bankruptcy where a business liquidates assets and undergoes a period of reconstruction in an attempt to salvage their company, special consideration must be made for these businesses.  Because many of these businesses may have no significant assets other than their commercial property, seizing and foreclosing or liquidating the property would be detrimental to the idea that they may be able to restructure their business and continue to operate profitably.  Since they cannot operate without a facility, there are special exceptions for commercial property that may help you keep your commercial property in spite of a Chapter 11 bankruptcy proceeding.

• If you are a part of a corporation or are an individual who has a single commercial property, you will be considered by the bankruptcy court as a single asset real estate debtor, and these special provisions will apply to your commercial property. 
• You will be allowed to keep your commercial real estate contingent to the filing of a restructuring or reorganization plan that shows that you have a means to make the business viable using the existing commercial property that you are attempting to keep from the bankruptcy proceedings. 
• By following the plan that you have submitted to the court, and repaying your creditors as ordered by the court, you can often keep your commercial property as a single asset real estate debtor under Chapter 11 bankruptcy.

Getting Help

If you are not part of a corporation, or are a business owner but not filing Chapter 11 bankruptcy, there may be separate restrictions on your commercial property that you will want to discuss with your bankruptcy lawyer.  Because of the nature of the recent changes to the bankruptcy law, these situations may be handled differently and the advice of a qualified and experienced attorney is essential in order for you to make the best choice and keep your property.