As a Chapter 11 lawyer, we can help you file for bankruptcy as a business or individual. A Chapter 11 is lesser known than the more common Chapter 7 or Chapter 13, but it can be incredibly useful for a particular set of debtors. This includes:
- Corporations
- Partnerships
- Individuals in business
The Purpose of Chapter 11
Most people file Chapter 11 because they have a business in financial trouble. The purpose of this chapter in the bankruptcy code is to enable you to continue business operations. Instead of being forced to close down due to an inability to pay debts, a business can continue to operate while the bankruptcy is in process.
This can be particularly useful for businesses that have situations where they may be waiting for certain clients to pay them or for contracts to come through. For example, if you are a manufacturing company whose clients are suddenly paying 90 days after receiving your goods, you could be going a full six months without receiving compensation, putting you in a financial bind. Filing a Chapter 11 would allow for you to reorganize and maintain operations while you waited for cash flow to improve.
You Need a Chapter 11 Lawyer
Filing for Chapter 11 can be a more complicated process than filing for a Chapter 7 or 13. This is because businesses are more complex in general. There is also far more that goes into the financial operations of one than what goes into running an individual household. This makes it important to work with an attorney who has experience in Chapter 11 and understands how to review business financial statements and how to cultivate a plan that is likely to be approved by the court. As one, we are happy to assist you.
This Is a Reorganization
As a Chapter 11 lawyer, we recommend that you take into consideration what a Chapter 11 will be like. This is a reorganization bankruptcy, and that means you will be obligated to pay your debts. The goal is not to wipe out or eliminate your debt but to create a plan that will allow you to make payments to your creditors in a way that does not financially cripple the business. Again, the goal is to allow the business to maintain operations. It is also not to have to shut down due to overwhelming and burdensome debt. However, it will not get rid of that debt altogether.
Your reorganization plan should include how you can continue to operate while cutting expenses. This may require you to stop paying overtime and to do things like cancel frivolous or unnecessary contracts. These are a few of the things we can help you identify when working through your reorganization plan. Just keep in mind that you will need to make some changes because you need to show the court how allowing you to file for bankruptcy will help your business become solvent going forward. If you are unwilling to change, it will be very difficult to make that case.
Schedule a Consultation
We can help you work through the process. We can also make recommendations along the way that will help the court and creditors approve your bankruptcy. To learn more or to get help, call our office and schedule a consultation today.