Debt is common in just about every business. Business owners borrow money to start the business and purchase items on credit in order to sustain it. As long as they have the recurring revenue to cover their debts, a company could continue to operate this way for a long time. However, when something happens that makes it difficult to repay the money they owe, business owners have to make some difficult decisions. They could either close their doors and liquidate their assets or file for bankruptcy under chapter 11 bankruptcy law in New Market.
What Is Chapter 11 Bankruptcy
This kind of bankruptcy is for businesses that are unable to pay their debts. It’s a reorganization plan similar to chapter 13 for individuals. Companies that want to stay in business may use chapter 11 bankruptcy law in New Market to present a plan to the court to repay the money they owe over time. When someone files for bankruptcy under chapter 11, their sole proprietorship as well as their assets are included in the restructuring plan. Assets of the owners of a corporation are not at risk.
Benefits of Filing Chapter 11
The main benefit of chapter 11 bankruptcy is that the business can continue to operate. Creditors are not allowed to contact the business owner to collect the debts they owe so that the owner can do business without constant harassment from the creditors. Unsecured debts may only need to be partially repaid, and secured debts are repaid over an extended period, which gives business owners a chance to adjust their strategies. With a fresh business strategy, the company may be able to not only recover from bankruptcy but be more profitable over time.
Before taking any action, a business owner should visit our website and schedule a consultation with an experienced bankruptcy lawyer. A lawyer who focuses on bankruptcy law can help a struggling business owner assess their options and choose the path that will most likely benefit them in the end. Business owners and their lawyers work closely throughout the bankruptcy case to create the most favorable outcome.