Chapter 11 Bankruptcy Could Save Your Business If It Is In Financial Trouble
If your business is in financial trouble and needs a fresh start, you might want to consider talking to a lawyer that specializes in business law. Your lawyer might recommend using a Chapter 11 bankruptcy, which is an option for businesses that allows them to reorganize. In order for your company to use this option, you will need to comply with the requirements of the bankruptcy court. Here are two things you will need to do if you use a Chapter 11 bankruptcy plan.
File The Paperwork
The first step in a Chapter 11 bankruptcy is filing the correct paperwork, and this is something your lawyer will assist you with. In addition to submitting the necessary paperwork, you will also have to pay filing fees to do this. When you file, the bankruptcy court will set up a hearing that is designed to serve as a creditor meeting.
During this meeting, you will find out the requirements needed for Chapter 11, and you will be given a certain amount of time to devise a plan.
Create The Plan
A Chapter 11 bankruptcy is designed to give a business time to reorganize as an attempt to save the company. To use this type of bankruptcy successfully, you must develop a strategy that explains how you plan on saving your company, and what you need in order to make this happen.
Typically, this plan will allow you to postpone paying some of your debts, or it may allow you time to set up new terms for your debts. There may also be a chance that some of your unsecured debts will be discharged during the bankruptcy proceedings.
This plan must also contain a strategy for increasing sales or profits, and this often involves rebranding or remarketing a business. It may involve offering new services or products, or it might involve expanding the business into new territories.
Once you have created the plan, you and your attorney can take it to the creditors and to the bankruptcy court. If it is approved, you will be able to continue running your business operations as usual, but you will need to follow the plan you created.
If you really want to save your business and feel like you can with some help and changes, using a Chapter 11 bankruptcy might be a good option to look into. If you would like to learn more about this, contact a lawyer like one from Caldwell Kennedy & Porter that specializes in business law.