Difficult financial times and other unforeseen circumstances can sometimes exhaust the resources of businesses. For business owners who are looking to maintain control of their companies, protect the jobs or workers and stop collection activities, Chapter 11 bankruptcy is the best way to move forward. Many major corporations and small businesses have filed for Chapter 11 bankruptcy and survived to start anew.
Here are four ways Chapter 11 bankruptcy can protect businesses in financial trouble.
- One of the most important mechanisms of Chapter 11 bankruptcy is that business owners can retain control of their companies. By maintaining control, businesses can reorganize and find new ways to become profitable again. However, in Chapter 11, the bankruptcy court maintains supervision and has control over some decisions, such as sales of assets or expanding operations.
- By filing for Chapter 11 bankruptcy, collection actions and lawsuits come to a halt. This can buy businesses time to invest finances and attention elsewhere to rebuild.
- Chapter 11 bankruptcy allows businesses to set up repayment plans that last for 10 years. Businesses often have more on their balance sheets than individual debtors do, and having a longer repayment period can make it easier to pay down large debts.
- Small businesses and large businesses can file for Chapter 11 bankruptcy. Chapter 11 bankruptcy provides protections for businesses regardless of size or income.
What Is The Goal Of Chapter 11 Bankruptcy For Businesses?
Chapter 11 bankruptcy is essentially a “second chance” for businesses to reorganize and become profitable. Surviving a Chapter 11 bankruptcy requires skill and experience. Bankruptcy attorneys have spent their careers helping businesses reduce or discharge debts and regain functionality.
The Sader Law Firm – Kansas City Bankruptcy Attorneys