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
- 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!