When financial times are difficult, many people and businesses consider filing for bankruptcy to keep debt collectors at bay. While it may not solve all your financial problems, a bankruptcy can at least give you time to evaluate your financial standing and come up with solutions for your problems. Here is some information that can help you decide whether to file for bankruptcy if you own a business.
What Is a Chapter 11 Bankruptcy?
A Chapter 11 bankruptcy in Port Orchard, WA allows a business to reorganize their debts, so they can pay them off while still maintaining their operations. When it is filed by an attorney, the court will consider the petition and examine your reorganization plan. The debtor has 120 days to file a reorganization plan once the order of relief is approved by the court.
Chapter 11 Options
To help your business return to profitability, there are several options from which to decide to help you get financial relief. A Chapter 11 bankruptcy allows you to:
• Discharge some debts
• Reorganize your business
• Reduce debt by paying some creditors
• Discharge some leases and contracts
A bankruptcy lawyer can help you decide how to restructure the debt and which creditors to pay before they present the plan in court.
Creditors Get a Voice
When you are trying to reduce your company’s debt, the creditors to which you owe money have a voice in the process. Your plan is presented to them to approve or reject. However, if they vote to reject the plan, the bankruptcy court may still approve it. Get more information about bankruptcies from an attorney by going to website.com.
If your Chapter 11 bankruptcy reorganization plan is approved, it gives you a chance to get your business back on track to making money and paying off the debts that you have left over.