Chances are that you worked hard to build your business; however, with a downturn in the economy, your customer base has dwindled. Your debts are piling up. You can file for Chapter 11 bankruptcy while maintaining your business. There is some preparation work that you must do, however, that will help you to forge ahead without any fear. Refresh your new financial start with Chapter 11 bankruptcy.
Organize and Establish List of Income and Debts
List all of your income sources in a notebook. Include every type of income you are aware of. Make a separate list of every bill that you pay. Once you have done that, subtract the bill total from your income total.
Hire a Qualified Chapter 11 Bankruptcy Attorney
If your total bills exceed your income and you expect this trend to continue due to your failing business and mounting debts, definitely hire a qualified bankruptcy lawyer who will counsel you and advise how you can proceed in filing for Chapter 11 bankruptcy.
Debtor in Possession Status
When your attorney (such as one from FactorLaw), on your behalf, files a voluntary petition asking for relief under Chapter 11, you will take on the identity of a debtor in possession, which means that legally you maintain possession and control of your assets as the reorganization process of Chapter 11 runs its course. However, once your plan of organization is completed, your case is faced with one of three options as follows:
- Dismissal of Chapter 11 case
- Case becomes a Chapter 7 issue
- Appointment of a Chapter 11 trustee
Be aware that your status as a debtor in possession allows you to operate your business and perform duties that a trustee would be expected to perform in the event a trustee is appointed. Your bankruptcy attorney will advise you every step of the way as reorganization of your assets is established.
Listen and Learn As Your Attorney Negotiates For Your Rights
Chapter 11 bankruptcy is a complex web of your reorganization plan that demands the knowledge of a savvy attorney with courtroom experience. The attorney will maneuver through the laws governing your bankruptcy proceedings. Creditors can vote against certain issues; however, bankruptcy codes can override when a majority of creditors are in agreement with your reorganization plan. Your knowledgeable attorney is aware of the twist and turns and is prepared to use learned negotiating skills for all eventualities that may arise.
Benefits of Chapter 11 Bankruptcy
Your business is allowed to continue normal operations while you are paying off your debts. Above all, there are no non-dischargeable debts awaiting you, and yes you can restructure secured debt payment that reportedly allows you to reduce payment amounts over a longer period of time. Say goodbye to those nagging creditor telephone calls. Under Chapter 11 bankruptcy rules, creditors cannot contact you as a business owner at home or while you are at work.