Henry Ford said, “Failure is simply the opportunity to begin again, this time more intelligently.” In order to begin again, most companies will need a little financial forgiveness.
Filing for Chapter 11 bankruptcy could be the difference between survival or failure. Many businesses have suffered this year, and many have had to close. If your company has financial problems, but you still have faith that you can succeed, it might be worth considering.
Chapter 11 allows limited liability companies, partnerships and corporations to restructure their finances. If your business has no future, then this is not the right move for you. If you believe you will be able to pay your creditors eventually, if only they give you a chance, it may be worth trying. However, it can be a costly process and does not guarantee success.
Once you file for Chapter 11, a court will appoint a trustee to oversee things. You need to come up with a plan to turn your company back into a profitable one that can pay its dues. You may need to shed staff or premises to reduce outgoings. You will almost certainly need to restructure your debts.
You do not get free rein as to how you do things. As well as your trustee overseeing you, your creditors must approve your plan. If there are multiple creditors, this can become complicated as they may want different things and be unable to agree.
Seek legal help to understand the different forms of business bankruptcy and their implications on your company. Filing for bankruptcy is a big decision to take, but it may be a necessary one.