If you are a business owner and are facing financial turmoil, do not fear–you may not have to close up shop. While the term “bankruptcy” makes many individuals nervous, it can actually provide you with a way out while still operating the business of which you care so deeply about. If this sounds like something that may work for you, please read on to learn more about your legal options going forward:
How can Chapter 11 business bankruptcy help me?
Chapter 11 business bankruptcy allows your business to continue operations and receive income, which therefore allows you to keep all your employees, in exchange for creating a five-year repayment plan. Additionally, Chapter 11 bankruptcy halts all collection activities, preventing vendors, banks, or creditors from any collection activities. In fact, Chapter 11 even allows businesses to keep a line of credit.
How does Chapter 11 bankruptcy work?
The first part of Chapter 11 bankruptcy is filing a Bankruptcy Petition, which an experienced attorney will help you with. From here, you will be issued an Automatic Stay, which will prevent all creditors from collection activities, which is a huge sigh of relief for many business owners. Next, you will attend the Meeting of Creditors, which is where your largest creditors may meet with you and your attorney to discuss your reorganization plan. The purpose of the reorganization plan is to restructure your debt, eliminate cumbersome contracts, and reduce overhead.
Once the plan is approved by the bankruptcy court, the largest creditors will take a vote. If the plan is in the best interests of the business and the creditors, the bankruptcy court will approve the plan. The legal standard is known as the “Liquidation Analysis,” which simply means that the creditors are receiving a better, though minimal repayment of their debt, as this is generally better for both parties than receiving $0.00 in repayment and having the business go under.
If you are someone who believes their business may qualify for Chapter 11 bankruptcy, you must act as soon as you can. Chapter 11 can be exactly what you need to get your business back on track. Do not wait. Reach out to our compassionate, knowledgeable bankruptcy firm to see how we can help.
Contact our experienced New York firm
Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of a seasoned Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.