Chapter 11 Bankruptcy and Your Business

Business Debt Relief

A faltering business can lead to a mountain of debt — so much so that you face losing everything you have put all of your time, energy and heart into for years. However, considering or filing a Chapter 11 bankruptcy, especially now, may stabilize your business and put you back on the path to success. The bankruptcy code allows small business access to special kinds of Chapter 11 that are designed to move more quickly than other cases.  

When the creditors come knocking, consider restructuring your business with the help of Chapter 11 bankruptcy and getting your business straightened out with the court’s assistance. Even if you do not actually file a case, consulting a business bankruptcy attorney will make sure you understand your options. Hiring a business bankruptcy attorney also may make your creditors more likely to negotiate with you even if you never file a bankruptcy.

The Benefits of Chapter 11 Bankruptcy

Bankruptcy no longer carries the social stigma it once did. Chapter 11, in particular, is meant to keep a business from folding and being liquidated by creditors. It allows businesses like yours to fall under the court’s protection against lawsuits and collections by creditors while also granting time and guidance in restructuring the debt. 

Has a creditor already filed a lawsuit against you? Chapter 11 will stop that lawsuit before you spend thousands of dollars defending it and before the creditor gets a judgment. 

Do you need to deal with contracts or leases that are too expensive?  Chapter 11 can help you do that, too.

Are you ready to sell your business but your debt or capital structure making that difficult?  You should consider a Chapter 11 filing.

Company Management and Chapter 11

While you are going through the Chapter 11 process, your business continues operating. Under Chapter 11, existing management remains in control and at the helm of the business. The company’s restructuring proceeds with you leading the way. 

Access to Money Under Chapter 11

The crux of your business’s problem is most likely cash flow. You either are not making enough to meet debts, have high-interest rates making it difficult to repay loans, or have poorly-fashioned contracts.  You may be able to obtain special financing inside of the Chapter 11 case that you could not obtain outside of it.  The new financing may be able to come in first position and prime your other liens.  Just this fact can make your existing creditors want to work with you more.  

When considering options for dealing with your business’s debt, you want to enlist the assistance of an experienced and trusted firm. Find a team of legal professionals with whom you can discuss your business’s unique circumstances. When dealing with debt, you need guidance from those who can help you formulate a plan to recover. If that includes filing Chapter 11 bankruptcy, a reputable firm will guide you through the process to secure a better, more lucrative future for your company.

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