Businesses run into financial problems from time to time just like everyday people, and those that do often turn to bankruptcy as a last resort. Chapter 11 bankruptcy has definitely become a very popular choice for many companies. Statistics show that, over the last five years, there have been nearly 50 thousand Chapter 11 bankruptcy filings. Check out the following to learn what business owners need to do if they feel that Chapter 11 is their best option.
For starters, Chapter 11 is primarily for those businesses that are still operating but who are burdened with an excessive amount of debt. Although this bankruptcy option has been made famous by large corporations, smaller businesses often meet the requirements of Chapter 11 as well. This debt option allows companies to work with Business Bankruptcy Attorneys in St. Louis MO to develop a plan that’ll pay off their debts while still staying operational and profitable.
Although very popular, there’s a big difference between Chapter 7 and Chapter 11 bankruptcy. For instance, most people refer to the former as liquidation bankruptcy because it requires a filer to sell all eligible assets to cover their debt. Chapter 11 bankruptcy is occasionally referred to as reorganization bankruptcy and provides businesses with more freedom to decide how their debts will be paid off.
Creditors and the bankruptcy courts will have a lot of authority when it comes to deciding the terms of a Chapter 11 filing. Debtors will work with Business Bankruptcy Attorneys in St. Louis MO and creditors to renegotiate and reorganize their debt. While some creditors may discharge certain debts, others may demand partial or full repayment. After a reorganization plan has been created, it must be accepted by all creditors, after which a bankruptcy court must approve the plan.
Go to Stlbankruptcyfirm.com and talk with one of the legal representatives who are available. Many bankruptcy attorneys offer a free consultation to those business owners who need it. Again, Chapter 11 is primarily for those businesses looking to resolve their debt and remain operational. Those who are looking to sell their businesses to repay their creditors may file for Chapter 7. Although a business will be given an opportunity to negotiate with their creditors, a bankruptcy court will get the final say in the matter.