Cash Collateral in Miami

Legal Counsel from a Chapter 11 Bankruptcy Attorney

One of the benefits of filing for Chapter 11 bankruptcy is that you can continue to operate your business even after filing. However, in order to do this, most business owners need to use the money that they already have in the bank which is referred to as cash collateral. Those who hope to use cash collateral must pay careful attention to the law so as to avoid future penalties.

Without an understanding of bankruptcy law, it can be easy to misunderstand cash collateral requirements. Our firm has over 25 years of experience helping consumers just like you reorganize their business by way of bankruptcy. Partnering with our Miami business bankruptcy attorney can ensure that your needs are met swiftly and effectively.

How to Successfully Make Use of Cash Collateral

The money that comes when liquidated assets are sold through Chapter 11 bankruptcy is considered cash collateral.

Any of the following can be examples of this cash collateral:

  • Documents of title
  • Securities
  • Cash
  • Deposit accounts
  • Negotiable instruments

Unfortunately, using this collateral isn't as easy as it seems. Because these assets are usually subject to the lien of a creditor, the business owner is required to obtain permission from the creditor to use the collateral.

Petitioning for use of cash collateral has to happen in the very initial stages of the bankruptcy proceedings. The best time to do so is usually on the day that the case is filed and if the creditor does not consent to the request, the debtor is required to prove that the creditor is protected against any decreases in the value of the collateral.

It can be difficult to successfully petition for the use of cash collateral on your own. Orshan, P.A. is here to prevent your business from experiencing unnecessary risk and we can work with you to create a solution that actively meets your needs.

Contact our Miami bankruptcy attorney today to schedule your free case evaluation!

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