The cost of owning and operating your own business is high, and sometimes it can be extremely difficult to meet the financial demands that come along with it. You, like many other California business owners, may find yourself in a position in which you can no longer make payments related to your daily operation and business-related debts.
Fortunately, carrying a significant amount of debt does not necessarily mean that you must close your business and liquidate all your assets. By filing for Chapter 11 bankruptcy, you may be able to reorganize your debts and reclaim a strong financial future for your business.
What can Chapter 11 bankruptcy do for me?
Chapter 11 bankruptcy may allow you to keep your business open and maintain daily operations while still enjoying the benefits and protection of bankruptcy. You retain the right to operate your business but will still have to follow the terms of your plan of reorganization.
The bankruptcy reorganization plan may employ one of a number of strategies in order for you to be able to maintain business operations and generate income during the bankruptcy process. Some of these include:
- Pursuing other business ventures to generate new streams of income
- Cramming down debt and repaying the debt back over time
- Liquidating and selling certain assets to pay off some debts
Your creditors may be active participants in the drafting of your bankruptcy plan, which means that they could have a direct say in identifying the most appropriate strategy for your bankruptcy. For example, your plan could include instructions for paying back creditors over a reasonable amount of time.
Filing for Chapter 11 bankruptcy may not be the best choice for your business, particularly if your debt burden is significant and your financial situation is grave. In these cases, it may be most appropriate to consider filing for Chapter 7 bankruptcy.
Experience counts when filing for Chapter 11
Chapter 11 bankruptcy can be a very complicated process, and either the business owner or his or her creditors have the right to file. It can be especially complex if the creditors are not willing to compromise or agree to the proposed terms of the bankruptcy agreement. No matter what your current circumstances may be, you need experience on your side when navigating this process.
A lawyer is crucial to effectively walking through bankruptcy and emerging to a stronger financial future. If your business is struggling with debt and creditors are constantly harassing you, you may consider how you could save your business through Chapter 11 bankruptcy.