Chapter 11 Bankruptcy
When you own a business in a struggling economy, you may feel financial stress at work and at home. Sales are down, customers can not afford to pay, so your percentage of bad debt increases and you find it hard to keep afloat. You understand, as in your personal life you may have had to tighten your belt just like your customers; but as a business owner, you feel frustration as you see the negative impact on your livelihood. As you look into the immediate future, you only see more red ink unless you can find a way to eliminate debt and move your business into the green again.
Hope For A Struggling Business
Businesses with a heavy debt load have the same opportunities as consumers do with bankruptcy options. If you are willing to liquidate your business, Chapter 7 bankruptcy might be an appropriate remedy for you. On the other hand, if you see hope for the future once you can get past your current debt, you might want to consider a Chapter 11 bankruptcy. Like Chapter 13 for consumers, Chapter 11 allows you to reorganize your debt and keep the business moving. Some of the biggest corporations in the world have gone through Chapter 11, so you have plenty of evidence that a structured resettlement could potentially work for you too.
Chapter 11 bankruptcy is not a do-it-yourself type of bankruptcy, so it’s imperative to hire an experienced Clearwater bankruptcy attorney to manage the case for you. Since you have a lot at stake to assure that your filing will allow your business to get back on firm footing, using a competent, experienced attorney is a good investment in your future.
How Chapter 11 Bankruptcy Works
Filing a Chapter 11 bankruptcy requires that your attorney file a bankruptcy petition and a statement of financial affairs just as with a personal bankruptcy. The main difference is that a Chapter 11 filing is accompanied by “first-day motions,” which allows the business to take actions that keep it running. For example, you need to keep paying wages, operating expenses, vendor invoices, etc. to keep the business viable. The court will schedule an emergency session and respond to these motions within a week to authorize you to pay these bills.
The meat of a Chapter 11 bankruptcy is the reorganization plan that divides creditors into classifications that determine the order in which they will be paid. It goes on to propose how much each creditor will receive and the terms of the payment. The plan must show that any disposable income the business has available will go toward satisfying debt. Once it is submitted to the court, creditors can approve or reject it, but the bankruptcy court can still approve the plan over the objections of some creditors. However, keep in mind that the bankruptcy court is an advocate for creditors, so the court may modify the plan to satisfy them.
To make the bankruptcy serve its purpose of putting the company on the road to good financial health, it is extremely important is that your bankruptcy attorney properly present information to the court. The plan will guide your company finances for 3 to 5 years or more, so you need a plan that gives you a fighting chance of saving your business and allowing it to prosper.
Put Your Trust In Blanchard Law, P.A.
If your company is in financial trouble, call Blanchard Law to discuss your options. Clearwater bankruptcy attorney Jake C. Blanchard has years of experience working with both businesses and consumers in asset recovery and bankruptcy proceedings. He understands the importance of developing a settlement proposal that is fair to both your business and your creditors, and he has in-depth insight into how creditors think.
If you’re considering Chapter 11 bankruptcy, you need the experience of Jake Blanchard and his associates on your side. Call Blanchard Law today at (727) 531-7068 or fill out our online form to request a free consultation today.