Owning and operating a small business can be an expensive endeavor. You may find yourself in a position where you are unable to make ends meet and keep up with your obligations each month, and eventually, this will threaten your ability to maintain operations. You may be looking for a way out and an option through which you can save your company.
The answer for your small business may lie in Chapter 11 bankruptcy. This process can allow you to reorganize your debt while continuing to operate your business. When the process is complete, you could have a more secure financial standing with a strong future in hand. If you are struggling with debt and looking for a way out, you may want to consider moving forward with this option.
What happens during Chapter 11?
One of the most common reasons why people do not file for bankruptcy is that they misunderstand the process and the benefits it can provide. There are a certain number of misconceptions about bankruptcy, and they may keep you from moving forward with something that can be helpful for the future of your company. Some things to consider include:
- Upon filing for Chapter 11 bankruptcy, the automatic stay will go into effect, which halts all collections processes against the company.
- After filing, the applicant will submit a plan for reorganizing debts or negotiate with creditors while continuing operations.
- The intent of Chapter 11 is to allow a business to become profitable again by paying off debt and remaining open simultaneously.
- A court has to confirm and approve any debt repayment plan submitted by a business filing for Chapter 11.
Once you complete the repayment plan, there may be a discharge of remaining balances. Regardless, emerging from the process should leave you in a position to remain profitable and successful for years to come.
Is it right for your business?
If you don’t see a way for your business to manage debts and secure a better financial future on your own, Chapter 11 bankruptcy could be right for you. It may be helpful to speak with an experienced attorney regarding the options available to you and which one may be most beneficial for your Louisiana business. Bankruptcy is likely not your first choice, but it could be what allows you to keep your business and look to the future with confidence.