If your business isn’t doing well and you can’t bear to see it fail, contact an attorney to find out what your options are. You may qualify for 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.
Before deciding what to with your business, contact a professional to learn more about your options. If Chapter 11 bankruptcy works best for your situation, your attorney can guide you through the process.
First, you will need to file a bankruptcy petition. 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 is put into effect. Due to this, you will be given the space needed to reorganize your business and financial plans.
Then a meeting of creditors will occur. At this meeting, the creditors you owe the most money to will be able to meet with you and your attorney to find out about your reorganization plan. 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.
So how does this work? 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 granted 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.
The main goal of Chapter 11 bankruptcy is to make the business able to create a profit again. It is important to keep the business running and the employees working in order to increase the net income.
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.