What Are the Benefits of Filing Chapter 11 Bankruptcy?
Seek Legal Advice From a Bankruptcy Attorney
Filing for bankruptcy can be one of the most difficult decisions a person or business can face. Bankruptcy is unjustly seen in a negative light. However, filing for bankruptcy is often one of the best ways for struggling businesses or individuals to regain control of their financial future. For individuals, Chapter 7 and Chapter 13 bankruptcy are usually the best options. For businesses, Chapter 11 bankruptcy is generally the right fit.
What Is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy involves helping a business restructure its assets, debts, and operations to enable it to overcome financial hardships. In many cases, Chapter 11 allows a business to avoid closing its doors and continue doing business both during the bankruptcy process and after the bankruptcy has concluded. In fact, several noteworthy companies have filed Chapter 11 bankruptcy and kept their doors open, including United Airlines and General Motors.
Benefits of Filing Chapter 11 Bankruptcy
The upside of filing Chapter 11 bankruptcy include:
- Stay – When you file Chapter 11, you will be granted an automatic stay, which prevents creditors from harassing you while you are participating in the bankruptcy process.
- Debt Forgiveness – There are few, if any, debts that are considered non-dischargeable under Chapter 11.
- Business as Usual – As long as you were not involved in any illegal activity, you will be able to continue doing business while paying off your debts. If you were involved in illegal activities, then a trustee may be appointed to operate your business until those issues can be sorted out.
- Restructure Debts – You will be able to restructure your debts so that your payments are affordable and spread out over a longer time.
- Unsecured Debts – Under Chapter 11 bankruptcy, you may be able to set up repayment structures that enable you to only be required to partially pay off unsecured debts. Also, in some cases, you will not have to pay unsecured debts at all.
Do I Need a Bankruptcy Lawyer to File Chapter 11?
Running a business is extremely difficult and often involves a myriad of different tasks to complete on a daily, weekly, monthly, and yearly basis. For this reason, business owners are many times jacks of all trades, learning how to get things done on their own, including issues involving payroll, taxes, customer service, workplace safety, and employee disputes. In some cases, this works out well for business owners. However, bankruptcy is not a task a business owner should attempt to complete on his or her own.
Having the assistance of an experienced bankruptcy attorney can make all the difference for business owners in their quest to successfully file Chapter 11 bankruptcy. Just as business owners know the ins and outs of their business better than others, an experienced bankruptcy lawyer handles bankruptcy cases daily. Therefore, when you have a bankruptcy attorney assist you with your Chapter 11 case, you can rest assured that they know what they are doing and will leave no stone unturned in their pursuit to get you back on your feet financially.