New Jersey business owners understand how difficult it can be to run a successful company. If you are going through a tough phase in the life of your business, you may find yourself facing a significant amount of debt and limited resources with which to deal with it. If this is the situation you are in, you may consider the benefits of filing for bankruptcy.
Chapter 11 bankruptcy may not be your first choice, but it could be a practical way to deal with your debt and allow your business to continue operations. There are many benefits to Chapter 11 for businesses in financial trouble, including allowing you to effectively deal with outstanding financial obligations in an organized manner. As a business owner, you would be prudent to always be aware of your legal options.
How does Chapter 11 work?
Chapter 11 primarily reorganizes business-related debt in order to allow a business to make payments on this debt while still maintaining operations. In many cases, businesses that file for Chapter 11 are large corporations, but this is an option for small businesses as well.
One of the main things you will have to do upon filing for Chapter 11 bankruptcy is to present a plan on how you intend to maintain profitability after the process is complete. This may include cutting costs, restructuring certain aspects of your business and more. Other things you may need to know about Chapter 11 include:
- Upon filing for bankruptcy, the automatic stay will go into effect. This means that debt collectors can no longer contact you and collections efforts will stop.
- In Chapter 11, debts will be reorganized, and sometimes, you may be able to get certain loans restructured for more manageable payments. The goal is to become profitable again.
- During Chapter 11 bankruptcy, you will have to submit paperwork and documentation about the financial aspects of your company.
If you think Chapter 11 is a viable option for you, you have no time to lose in taking the appropriate steps to move forward to a better financial future.
A better future for your business
When struggling with a significant amount of debt, it may seem like the future of your business is at stake. While your situation is dire, filing for bankruptcy could be a viable way to deal with your debt and build a better future for your business. Chapter 11 could work for your company, and a complete evaluation of your case can help you better understand this option.