If you are considering filing Chapter 11 bankruptcy for your business, continue reading and reach out to our experienced bankruptcy attorney today to learn more about the process ahead. Give our firm a call to learn more about our services and how we can assist you in filing for bankruptcy to get back on your feet.
What is Chapter 11 bankruptcy?
It is not uncommon for businesses to go through financial struggles. When a business is in a great amount of debt, those in charge may consider filing for bankruptcy. Bankruptcy can be used for individuals and businesses alike. The process of filing for bankruptcy can relieve debtors of their stress by allowing them to have the chance to restructure their finances. Chapter 11 bankruptcy is known as business bankruptcy. This type of bankruptcy can allow a business to stay open, continue their daily operations, and maintain their employees on staff while a reorganization plan is put into place. Chapter 11 bankruptcy allows the business owner to repay their debts over five years.
What is the process for filing for Chapter 11 bankruptcy?
The first step an individual who is filing for bankruptcy will do is file a bankruptcy petition. This petition will include the following:
- A list of assets
- A list of liabilities
- A financial statement
- A statement of any outstanding contracts or leases
Once this paperwork is complete, the automatic stay will go into effect. This will prohibit collectors from harassing debtors through collection activities while the automatic stay is in effect. The automatic stay will prohibit collection calls, letters, bank restraints, repossessions, lawsuits, and foreclosures. The automatic stay allows the debtor to find a sense of relief as they refocus their energy towards restructuring their finances.
Next, the meeting of credits will occur between the debtor and the creditors they owe money to. This will determine a reorganization plan for the debtor as they begin to pay back their debt. This reorganization plan is required to be approved by the bankruptcy court.
What is the goal for Chapter 11 bankruptcy?
The overall goal for filing for Chapter 11 bankruptcy is for the business to gain a profit once again. This process will prevent vendors, banks, and creditors from shutting down the business and will allow a slow stream of payments to these creditors which will help the business to get back on the right path.
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 an experienced 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.