As a business owner, you never want to see your business fail. You have put hard work and money into that property and created something worthwhile. 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.
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. With this in place, you will be given the space you need to work on your finances and will not have to deal with the harassment of creditors.
What happens at the meeting of creditors?
A meeting of creditors will occur when 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 operating 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 five-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. 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.
Why is Chapter 11 bankruptcy called business bankruptcy?
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.
The Law Offices of George Poulos is an experienced Workers’ Compensation, personal injury, bankruptcy, and Social Security Disability law firm with offices in Queens and the Bronx. If you require strong legal representation, contact our firm today to schedule a free consultation.