Bankruptcy Options

Business Filing Bankruptcy

If your business is having trouble paying off your debts, you might want to file Chapter 11 Bankruptcy. A business filing bankruptcy does not have to sell off all its assets, but rather show that there is going to be income coming in that it can use to pay off some or all of its creditors through debt restructuring.

The law requires those debtors who wish to file bankruptcy to attend credit counseling, so this should be the first step for businesses filing bankruptcy.

Before deciding whether or not to file for Chapter 11 Bankruptcy, the business filing bankruptcy should consult with an experience business bankruptcy specialist. These attorneys can help determine whether your business filing bankruptcy is the best option or whether there are other solutions that might work in your situation.

The attorney chosen by the business filing bankruptcy will need all the financial records for the business. The business filing bankruptcy will need statements of profits, statements showing the debts owed, and future forecasts for the business. These will need to be passed on to the court as well when the business filing bankruptcy proceeds with the bankruptcy process.

Once a business filing bankruptcy has filed their petition, there is a stay in place that prohibits creditors from doing anything to collect the debts that are owed to them. This gives a business filing bankruptcy time to reorganize their debt.

The business filing bankruptcy and its attorney will need to create a repayment plan within 120 days of filing for bankruptcy, and once this plan is approved by the court, will have to keep up with the planned payments or risk being forced into Chapter 7 Bankruptcy and having all assets liquidated to pay off their creditors.

Those businesses filing bankruptcy who do not qualify for Chapter 11 Bankruptcy will most likely have to file for Chapter 7 Bankruptcy, which includes liquidation of the business assets.

Businesses filing bankruptcy might also choose to file Chapter 7 Bankruptcy if the business does not have a future, or if there are no real assets that can't be reproduced after bankruptcy. It might also be the case that the business filing bankruptcy has such a high level of debts that reorganization just isn't feasible.

A business filing bankruptcy is going to have to take a lot of time and add a lot of legal fees onto their debt load in order to file Chapter 11 Bankruptcy, and if the business is already failing this might not be the best option for those involved.

Whichever option that a business filing bankruptcy chooses, bankruptcy allows for a new start once the bankruptcy debt is discharged. This might mean continuing on to be successful in the original business after a reorganization, or starting a whole new business after a Chapter 7 Bankruptcy.