As a business owner, you do not want to see your business go down. Bankruptcy can be a hard decision to make. However, it can be the right decision. If your business is struggling, you should consider Chapter 11 bankruptcy. This can allow your business to continue your day to day operations. With your business still in operation, your employees can keep working as well. Chapter 11 bankruptcy is often referred to as business bankruptcy because it allows owners to keep their businesses open. This is the main procedure businesses use to plan their finances. Bankruptcy options for individuals can be handled through Chapter 7 and Chapter 13 bankruptcy.
For business bankruptcy, you will need to file a bankruptcy petition to begin the process. This will include a financial statement, a list of all assets, a list of liabilities and a statement of any outstanding contracts or leases. Once the paperwork is filed, an automatic stay goes into effect to bar creditors from contacting you. You can then be given the space you need to work on your finances and will not have to deal with the harassment of creditors.
A meeting of creditors will occur to inform creditors that you owe the most money to about your plan to reorganize your finances. This plan is made with your attorney to continue paying your operation costs while paying off debt at the same time. The plan must be approved by the bankruptcy court to ensure your status.Debt payments that your business built up are restructured. This means that these payments will now be paid throughout the course of a 5 year plan.
When you are approved for Chapter 11 bankruptcy, it will stop the shutdown of your business by any creditors, vendors or banks. Instead of sending all income to those you owe money to, claiming bankruptcy will allow for a slow stream of payments to your creditors. This will allow your business to make a revenue stream. Chapter 11 bankruptcy also allows businesses to keep their line of credit and to receive any money owed to it. Insurance money from an open claim is allowed to remain flowing. Since the main goal of Chapter 11 bankruptcy is to allow a revenue stream for your business, your business will remain open and operating to create a profit for it. By allowing your business to stay open, it can keep your dream alive.
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.