Establishing your own business might be one of your lifelong dreams. However, it is not all sunshine and rainbows in the field of business. You could experience financial turmoil, leading you to consider shutting your business down.
But there are options available to you other than closing your business. Before you firmly end this chapter in your life as a business owner, consider a business reorganization through Chapter 11 Bankruptcy.
Restructuring your debts while continuing business operations
Filing a Chapter 11 Bankruptcy allows you to keep operating your business while you recalibrate your business’s finances. It requires great effort to plan your business reorganization to benefit your shareholders and creditors. Chapter 11 Bankruptcy entails developing a reorganization plan within four months. The plan should propose feasible steps for the business to pay its debts. It could include reducing expenses, selling assets, renegotiating debts or minimizing operational costs. The court will then evaluate your plan to decide whether it is workable and fair for your shareholders and creditors. Until you finalize your plan, the court prohibits your creditors from taking action against you. This gives you enough breathing space to focus on restructuring your business.
Implementing your plan to recover from bankruptcy
When the court approves your reorganization plan, you would have to implement it with their continued supervision. The court will oversee your business’s operations to ensure you comply with the plan and repay your debts accordingly. And when you have completely executed your repayment plan, the court discharges your debt. The discharge order releases you from debt, signaling your fresh start.
When faced with heavy debt, you might feel like it is the end of the road. However, bankruptcy is more than just shutting down a business. Businesses can also file for bankruptcy with reorganization in mind. Chapter 11 Bankruptcy might be an appropriate option for your business moving forward. The process is not easy and involves complex scenarios, so you must proceed cautiously. Having an experienced bankruptcy lawyer by your side during this challenging time could help you get back on your feet.